Friday 30 September 2016

Dairy-driven demand fizzles out down south

Average price at €9,057 per acre is down by 25pc on 2014 values

Jim O'Brien

Published 06/01/2016 | 02:30

The biggest farm sold in Munster was a 258ac grass farm at Ballymackey near Nenagh - it was sold by Bergin auctioneers for €2.205m or €8,546/ac.
The biggest farm sold in Munster was a 258ac grass farm at Ballymackey near Nenagh - it was sold by Bergin auctioneers for €2.205m or €8,546/ac.

The dairy surge was all the talk in Munster in 2014 and led to a sharp rise in the price of land, but 2015 appears to have been a horse of a different colour.

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As in many parts of the country the amount of land sold under the hammer increased. In Munster it rose by 17.3pc. However, the amount of money generated declined by 6.24pc. The average price per acre tumbled from €11,338 in 2014 to €9,057 in 2015, marking a 25pc drop. A total of 38 successful auctions in 2015 saw 2,303ac changing hands, compared to 1,962ac in 2014. However, this greater amount of land generated €1.4m less in hard cash, with a total figure for auction sales of €22.24m in 2014 compared to €20.86m in 2015.

While some auctioneers in Munster are not surprised by these figures, others are adamant that their experience of the year is more reflective of what happened in the Leinster regions.

Tom Crosse of GVM Limerick says that the results of this survey bear out what he experienced in 2015. "I found it difficult to bring places across the line in the auction room. I have done a quick survey of the 1,500ac we sold both by private treaty and by auction and our average price for land sold in Limerick and west Tipperary appears to come in under €9,000/ac," he said. "In fact a figure of €8,000 to €8,500 is closer to the mark."

He believes the dairy farmer chose to 'gear up' the farm this year and decided to spend on plant and machinery rather than on land.

John Stokes of REA Stokes and Quirke, Clonmel says these figures are not at all reflective of what he has experienced. "Quality land in South Tipp was making top money at €10,000, €12,000 to €15,000/ac," he said. "Even marginal, planting land guided at €3,000 to €4,000/ac made decent money.

"I sold a farm of marginal land near Portlaw recently and got between €6,500 and €7,000/ac for it," he said.

Clonakilty auctioneer John Hodnett of Hodnett Forde, agrees saying he is getting between €10,000 to €15,000/ac in private treaty sales. "The last nine months have been very buoyant and certainly, excluding planting land, the average we are getting is €12,000 to €13,000/ac."

He says that smaller parcels of up to 50ac are selling best and the dairy farmer is still very much in the market for these.

Private treaty sales

Dan Fleming of Blarney Estates thinks that the public auction might not be the best barometer to assess farm sales as the process of getting money together takes time.

"On the private treaty front I am getting up to €15,000/ac but I also got as low as €8,000/ac for land this year. If you have good land you'll get the good money, it's as simple as that," he said.

Looking at some of the facts and figures in Munster as highlighted by the 38 recorded sales in this survey, the biggest farm of land sold was a 258ac grass farm at Ballymackey near Nenagh in Co Tipperary. The property was sold by Bergin auctioneers for €2.205m or €8,546/ac.

A young local businessman with farming interests was the successful buyer.

Three other farms in Munster broke the €1m mark. A 162ac farm located at Sheskin on the outskirts of Thurles was sold by Bergins along with local agents Shelly & Purcell.

The grass farm located within shouting distance of Semple Stadium and across the road from the racecourse was bought by a solicitor believed to be acting for a local farmer who paid €1.835m or €11,327/ac for the property.

Another €1m property to sell under the hammer was a 167ac grass farm at Croagh in Co Limerick that sold to a pair of local farmers under the hammer of auctioneer John Giltinane for €1.37m or €8,203/ac.

The last place to cross the line at €1m was a 138ac grass farm at Barnacurra, Newmarket in Co Cork bought by a number of farmers for €1.035m at an auction conducted by Michael Drew.

The highest per acre price paid was given for a 19.16ac parcel at Powerstown, Clonmel in Co Tipperary sold by Sherry FitzGerald Power and Walsh to local farmers for €385,000 or €20,093/ac.

The next highest was for a 49ac holding at Aghabollogue, Coachford in Co Cork where Killian Lynch sold the grass holding with an imposing old residence for €905,000 to a buyer not involved in farming.

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