Mature woods sell for €3,500 an acre
Western farmers offloading forests to trade up and purchase better quality agricultural land
Published 21/09/2010 | 05:00
There is increasing evidence that farmers are selling land suitable for forestry and ground planted for the past 15 to 20 years to buy better-quality agricultural land.
According to Roscommon-based auctioneer John Earley, there is a live market for such property. "Vendors are selling both unplanted land and ground with 20-year-old timber, where all the premia have been claimed," Mr Earley said.
"They are getting €3,500-5,000/ac and are going on to buy better land at €8,000/ac and more."
He admitted that in some instances the crop on the planted land might be somewhat neglected and the parcels can be large, anything from 50-100ac, but the crops still have value.
According to Farming Independent forestry columnist Joe Barry, there is a buoyant market for timber as the use of wood for heating means that demand is outstripping supply.
"The contractors are flat out at the moment, every bit of available timber is being snapped up," claimed Mr Barry.
"For instance, if the Edenderry power plant in Co Offaly reaches its target of co-fuelling its peat burning with 30pc carbon-neutral fuels, it will have the capacity to burn the entire output from Irish woodlands."
Traditionally, the real money to be made in forestry is from the premia. Indeed, many investors who bought forestry land at less than IR£1,000/ac in the mid-1990s have received three times the purchase price in premia and still have the land. However, the general consensus in the industry is that the forestry premium regime is about to change. While the Department of Finance has accepted that the forestry industry is worth up to €8bn to the economy, it is nevertheless proposing to reduce the annual forestry budget from €104m to €84m. According to the department's latest figures, it is targetting planting levels of 2,000ha, whereas the previous stated target was 10,000ha.