Farm Ireland

Sunday 23 October 2016

Challenge to meet forestry targets

Country should 'treble the amount of new land being planted from 7,000ha annually to 17,000ha'

Jim O'Brien

Published 18/05/2016 | 02:30

At present 11pc of Ireland's land area is under forestry and it is intended to raise this to 18pc by 2050.
At present 11pc of Ireland's land area is under forestry and it is intended to raise this to 18pc by 2050.

Ireland has a real challenge if it is to meet its forestry targets by the middle of the century, according to a report published by the Society of Chartered Surveyors Ireland (SCSI), in association with Teagasc.

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The land market report found the average price of stocked forestry land in 2015 was estimated at €3,813/ac with prices fluctuating between a low of €2,500/ac up to €5,000/ac. However, this represented a 17pc increase on the 2014 price.

Yet, the report states that in order to meet this challenge by 2050, the country would want to practically treble the amount of new land being planted from 7,000ha annually to 17,000ha.

At present 11pc of Ireland's land area is in forestry and it is intended to raise this to 18pc by 2050. There are 750,000ha currently under forestry and bringing this up to the 18pc target will take an additional 450,000ha. According to Teagasc research, there are about 0.43 million hectares of marginal land with significant potential for forestry. Planting all this land would bring the national forestry coverage to 17pc.

The report is not very optimistic that farmers will rise to this challenge believing that many farmers will want to stay in mainstream agriculture.

Trim auctioneer Thomas Potterton agreed, stating: "It is difficult for farmers to let land go out of what they regard as mainstream production."

He said forestry is such a long-term investment it is less attractive from a financial perspective and landowners with land rented may see forestry as a poor alternative to rental income.

The replanting requirement that land must stay in forestry in perpetuity is a clear disincentive. "However, I believe all this is changing," he said.

Looking ahead

The surveyors are optimistic about the overall land market for 2016 and expect tillage farmers to be among the key players with 53pc of those interviewed expecting crop men to be among the principal type of farmers looking to rent agricultural land. The SCSI/Teagasc Agri Land Market Review and Outlook 2016 report was compiled from Teagasc resources and in conjunction with 67 chartered surveyors nationwide.

Despite poor prices, tillage farmers are also expected to be the most active in land purchase with dairy farmers anticipated to be the next most active group. Dry stock farmers are expected to be least active in the land market. Tillage farmers and dairy farmers are also expected to be the main takers for vendors looking to sell land and landlords looking to lease out land. Given the crisis in tillage and the reality that prices are back at what they were 35 years ago, Mr Potterton says that cereal farmers and crop farmers are the eternal optimists.

"They are most certainly among the top activists in the rental market and when the land and location is right, they will make every attempt to buy."

Carlow auctioneer John Dawson said "scarcity" was driving the prices in both land sales and renting.

"With long-term rental agreements in place there is less land coming on the market," he said, adding, "2015 was a great year with lots of land sold in Carlow, Kilkenny, Wexford and Wicklow. It is not happening this year so far." He said it may be to do with uncertainty in the agri-sector.

Residential versus non-residential

The report also digs down into land sales in terms of the price difference between the size of holdings and their residential or non-residential status. The dearest non-residential land is in Leinster where plots of less than 50ac make an average of €10,608/ac.

The equivalent in Munster is €9,970/ac and in Connacht/Ulster it is €6,163/ac.

Comparing 2014 and 2015, the report identifies a 15pc increase in the per acre price for residential holdings of less than 50ac in Leinster.

According to Mr Potterton this is reflective of the fact that people living within commuting distance of Dublin are still major customers for "the house and the few acres".

"I recently sold a house and 43ac outside Trim to a businessman based in Dublin and it made €700,000 under the hammer."

In contrast, the fact that there is little difference between the per acre price for residential and non residential property of between 50 and 100ac would indicate that this type of holding is farmer territory where the house is often seen as a liability.

This is reflected in Munster where residential holdings of less that 50ac in Munster commanded almost €2,000/ac more than holdings without a house while residential holdings of between 50ac and 100ac cost a mere €200/ac more than their non-residential counterparts.

In Connacht/Ulster the per acre price for residential holdings of less than 50ac decreased by 6pc between 2014 and 2015 while the cost of similar sized holdings without a residence went up by 10pc.

One of the clear findings of the survey is the continued disparity between land prices in Connacht and Ulster compared with the rest of the country. At €5,748, the average price for an acre of ground in Connacht/Ulster is just over half what it is in Munster at €9,764 or in Leinster at €10,089.

Jason Loughrey of Teagasc described 2015 as a mixed year overall with a slight decline in interest from dairy farmers and fewer cash buyers.

He said the decline in milk prices led to less interest in purchases in the second half of the year.

"The lack of good quality farms coming on the market and widespread flooding in the midlands also had an impact on supply," he added.

Land letting

The survey finds that letting prices across the regions and the sectors have remained stable but the availability of land is tightening with many opting for longer leases to avail of the tax benefits and incentives outlined in Budget 2015.

The dearest rental prices for land are paid in Munster where grazing ground commands €177/ac and cereal ground commands an average of €220/ac. In Leinster the prices range from €162/ac for grazing to €216/ac for cereals.

In Connacht/Ulster grazing ground makes €146/ac, cereal ground €138/ac, with potato ground making €190/ac.

Mr Dawson said prices varied widely and were competitive due to the scarcity, with prices from €200 to €370/ac secured depending on the type of land. He said the prices paid in 2016 were on a par with 2015.

Brexit and the Irish Land Market

The SCSI/Teagasc report believes that Brexit will have a negative impact of agri-food exports and consequently an adverse impact on land prices and rental prices.

‘Fillet of farm’ would suit any enterprise

Some bigger farms coming on the market include a 172ac holding at Ballynameagh, Coole in Co Westmeath. It will be sold at auction today at the Navan salesrooms of Raymond Potterton and guided at €7,000/ac.

The Ballynameagh holding for auction today is 4km from Castlepollard and 15km from the N4 at Rathowen. It is described by Stephen Barry of Potterton’s as a highly fertile farm under permanent pasture.

“The place is an unbelievably good farm. A 250ac portion of the original holding was sold a number of years ago and this is the ‘fillet of the farm’,” Mr Barry said. The place is laid out in well-sheltered fields with the minimum of waste. The yard on the property includes a two storey derelict farmhouse.

According to Mr Barry the farm would suit any enterprise including dairying. It will be offered in lots today at the Navan auction rooms of Raymond Potterton at 3pm.


Meanwhile, a 114ac farm at Rosetown and Greenhills, Athgarvan, Co Kildare is set in horse country between Athgarvan and Two Mile House in the heart of Kildare. The lands are all in grass and divided into six manageable divisions with mature hedging along all boundaries. According to Will Coonan of REA Coonans, the ground is of excellent quality and suitable for all agricultural enterprises.

A substantial yard set back off the road has livestock handling facilities, haybarns and outhouses. There is almost 900m of river frontage on to the Liffey and decent road frontage. The property will be sold at auction at Lawlor’s Hotel, Naas at 3pm on Thursday, May 26.

Indo Farming


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