Monday 26 September 2016

Land leasing market is hotting up

Jim O'Brien

Published 02/12/2015 | 02:30

Land leasing prices are varying widely from €420/ac for vegetable land in the midlands to €120/ac in the mid west for grazing or fodder ground
Land leasing prices are varying widely from €420/ac for vegetable land in the midlands to €120/ac in the mid west for grazing or fodder ground

The land-letting scene for 2016 is hotting up already and the market is by no means steady or predictable. Prices are varying widely from €420/ac for vegetable land in the midlands to €120/ac in the mid west for grazing or fodder ground.

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Laois auctioneer William Mansfield says that lettings are busy with a mix of long term and shorter-term arrangements.

"I'm seeing prices of €270 to €280/ac being paid on five year leases of grazing ground with a review built in during the third year," Mr Mansfield said.

While €180 to €200 is generally paid for conacre wheat ground he has negotiated around €210/ac for conacre land for winter wheat.

In some headline prices, the Rathdowney auctioneer recently concluded three-year leases for carrot growing ground with prices from from €400 to €420/ac.

"Of course the lease had to be three year with corn planted on the particular ground at either side of the carrot growing year. The lease for the corn was €180 to €200/ac," he explained.

In one particularly lucrative lease in the Mansfield portfolio, a dairy farmer is paying €300/ac for grazing and fodder ground.

Under the terms of some long-term leases Mr Mansfiled has seen dairy ground let for between €270 and €280/ac.

In north Tipperary Eoin Dillon recently negotiated a six-year lease of €280/ac on a 70ac farm while he let another 70ac tillage farm to a dairy farmer for €240/ac on a seven-year lease. The tillage ground is being put into grass.

He also recently negotiated a seven-year lease on 44ac for €230/ac.

This lease begins in January 2016 with a review after four years.

Bubble

In south Tipperary Pat Quirke describes the year gone by as a 'bubble' where high numbers of young entrants came into farming induced by the promise of entitlements.

"High prices were paid last year because there was a lot of new tenants chasing land but I believe it will settle down to €200 to €250/ac for good grazing ground. Paying €250 to €270/ac will be exceptional," he said.

Across the border in Kilkenny auctioneer Joseph Coogan recently let tillage ground on a five year lease for €210/ac. He conducts most of his lettings in January or February and anticipates strong demand, "There is a demand for grazing land and I expect strong prices for good, well fenced, well watered grazing ground to make north of €250/ac and up to €300 in the case of adjoining dairy farmers."

Mr Coogan expects most of his annual lettings to be turned over and expects a re-run of the heavy demand for silage land for one or two cuts.

"Expanding dairy farmers are grazing all the land near the milking operation and are willing to travel up to 15 miles for silage," he said.

Further south in Co Limerick Tom Crosse saw prices as low as €120 to €130/ac being paid for poorer ground with up to €250/ac being paid for good dairy land.

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