Conacre stand-off develops

Tough negotiations and conflicting prices are the main features of the conacre market so far this year.

Although auctioneers in some areas maintain that demand will remain similar to last year, others report that farmers are insisting on lower prices for the coming season.

In some cases a stand-off has developed between landowners and farmers who have not yet settled last year's bills.

Few deals have been closed at this stage, but indications are that tillage conacre will either stay at 2009 levels or fall.

Wexford-based auctioneer Denis Howell, from Warren Estates, said several hundred acres in his region have been set at €140/ac.

"Good land is in demand and the range is €140-150/ac for an 11-month lease," he said.

"It's very surprising but it looks like the market is going to hold up at last year's level," he predicted.

"Our average last year was €150-160/ac, with a few exceptions of €200/ac."

However, Tipperary-based auctioneer Paddy Caplice said farmers were trying to pull back prices from last year's level of €145-155/ac.

"Some farmers are trying to renegotiate to around €125/ac. I heard of one case where the farmer wanted to drop down to €100/ac, but that was not a runner," he maintained.

IFA grain chairman Noel Delaney said he knew of farmers who had agreed prices at €80/ac and €100/ac.

"Farmers are very slow to close deals at the moment, and some landlords are still waiting on payment for the second half of last year," he said.

Entitlements

"A lot of farmers who are taking conacre are doing it to keep their entitlements but, in general, if the price is too high, they will walk away." he added.

"There is no point in working for nothing," he insisted.

Teagasc tillage expert Michael Hennessy said that, although the conacre market was always difficult to predict, he expected prices to fall in all areas.

He said farmers were reporting falls of €30-50/ac in the south of the country and €30/ac in the Carlow region, with bigger drops expected in the northeast as potato growers moved out of the market.

"However, it is very difficult to see how any farmer could expect to break even at prices higher than €60-70/ac," Mr Hennessy insisted.