The land rental market remains on fire, with the cost of con-acre running around €100/ac ahead of last year.
Demand for grazing ground has been described by auctioneers as “crazy”, while one farm consultant labelled the prices paid for con-acre as “absolute madness”.
Tom Crosse of GVM in Limerick said the price of grazing ground this year generally ranges from €250/ac to €300/ac, although up to €350/ac has been paid in exceptional cases. This is €100/ac up on 2020 when the bulk of grazing land made around €150-200/ac.
A similar situation is reported in Cork, where Blarney auctioneer, Dan Fleming, said grazing ground was making around €300/ac.
Meanwhile, Padraic Murtagh of James L Murtagh auctioneers in Mullingar, said the land rental market had become “a total scramble”.
The Westmeath auctioneer said he was getting in excess of €200/ac for grazing ground at the moment and he expects the price to rise as the supply of land tightens.
Tighter nitrates regulations, which have increased the dairy cow excrement rate from 85kg N to 89kg N, has been a major contributory factor in the stronger demand for grazing ground.
The changes mean that the stocking rate on intensive dairy holdings has effectively been cut by 5pc, and affected farmers are hunting for extra ground rather than cutting cow numbers.
A significant reduction in the land area available for con-acre, as a consequence of the switch to long-term leases, has also impacted the market.
In addition, Mr Crosse said more farmers are opting to rent this year rather than purchasing because they don’t want to commit to increased borrowing.
However, Templemore-based farm consultant, PJ Phelan, has questioned the wisdom of farmers paying over €200/ac for rented land; although he admitted that between €150/ac and €400/ac has been paid this year for ground.
“No matter how you do the figures on beef and tillage it just doesn’t make sense to pay over €200/ac,” Mr Phelan maintained.
While he accepted that dairy enterprises could justify the higher rental prices, he said milk suppliers were handing their “hard-earned profits” from such ground to the land owner.
“If farmers want to stay in farming then they can’t continue to pay the rental prices they are currently paying. I’d be advising guys not to go beyond €200/ac,” Mr Phelan said.
“Farmers would be better off picking up a part-time job than paying €30,000 to rent 100ac,” he argued.