Farm Ireland

Monday 22 January 2018

Conacre and grain price link promoted

Caitriona Murphy

Caitriona Murphy

A LEADING Teagasc specialist has urged farmers to link land rental costs to the price of green grain next harvest.

The move follows reports of an early rise in the cost of conacre on the back of improved grain prices.

Deals on some smaller land parcels have already been closed at €15-20/ac higher than last year.

With tillage farmers still struggling to reduce significant debt burdens from the past two harvests, any move to increase prices will be met with fierce resistance.

Teagasc tillage specialist Ivan Whitten urged farmers to agree deals based on the price of green grain next harvest.

"It's the fairest way to do it," he insisted. "Who is to know what will happen to grain price next year?

"This way, if grain price goes up, the landowner gets more rent and if grain price falls, the tillage grower is not destroyed," he said.

Where farmers have used this system, most agree a payment of 80pc of the green price of 1t of grain from Glanbia, Dairygold or one of the local merchants. Additional details, such as maintenance of hedges, are sometimes included.

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"The bottom line is farmers are still trying to recover from recent years and most landowners appreciate that," he added.

A leading Laois-based auctioneer John Hennessy has closed five deals in the range €125-140/ac in recent weeks. The prices were for parcels ranging from 16.5 to 45ac in size and will be set in winter barley.

"Prices are hardening by about €25-30/ac but the top of the market is around €135/ac at present," said Mr Hennessy.

"The general run of it is €125-135/ac. Most guys are still trying to recoup the losses from the past three years so prices will not go up hugely," he maintained.

Wexford auctioneer Robert Rackard predicted a conacre price of €150/ac for the coming season.

"Last year, prices ranged from €75-125/ac, with some pockets of €200/ac," the Enniscorthy agent said.

"This year I could see it could range from €100 to €150/ac."

Mr Rackard said he had at least half a dozen young farmers looking to secure new land.

"There is more confidence out there, there is some light at the end of the tunnel," he said.

Another Wexford-based auctioneer, Denis Howell from Warren Estates, maintained that a rise of €15-20/ac sounded "about right", but he added that it was too early to tell.

In Tipperary, auctioneer John Stokes said the increased grain prices had been a God-send to farmers.

"I can see conacre prices holding around €150/ac-plus," he said. "There might even be a bit of an increase."

In Carlow, John Dawson maintained that conacre "was bound to climb €20-30/ac".

"It is early to speculate because a lot depends on how the US maize harvest turns out. Grain prices will be dependent on the supply of alternative feeds," he added.

Irish Independent