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Hot debate over price of conacre

Uncertainty and confusion appear to be the biggest elements at play in the conacre market as farmers and landowners debate how much tillage land is worth.

While individual auctioneers have quoted prices as high as €200/ac in the south, estate agents in the midlands have closed deals at €130-140/ac.

Some farmers still harbour the suspicion that this year could be used as a reference point for changes to the single farm payment, with the result that some landowners are reluctant to let out their land.

The payment capacity of farmers is playing a role in negotiations. As one commentator put it: "I'd rather get €150/ac from the man who can pay it than be offered €200 from the fellow who can't."

However, auctioneers remain adamant that rental prices will increase this year on the back of higher grain prices.

Kildare-based agent Luke Dempsey said the baseline for conacre prices had risen from €95-100/ac last year to €130-140/ac this year.

"The rise reflects the increase in grain prices," he said. "There is huge demand for land.

"A lot of people are still afraid that this could be a reference year and are holding onto land."

He added that many of the farmers in his area were involved in forward selling their grain and calculating rental prices based on land quality.

"The deals vary," he said. "For example, if a farm is in need of lime, that is priced into the deal or the price for a field susceptible to take-all is reduced by the cost of spraying it."

Clonmel-based agent John Stokes maintained that it was too early to be sure but prices of €150-220/ac were being talked about. However, the agent would not reveal details of any deal closed in that price range.

David Keane from Midleton in Co Cork predicted prices of €170-200/ac for winter wheat land, up €20-50/ac on last year. For spring crops, he also predicted a top price of €200/ac.

"There has been very little set yet but they are all predicting a very lively trade for the coming year," he said.

"Land is scarce and people are expecting changes in the single farm payment. That's what drove prices up to €150/ac last spring after a pretty bad year for grain."

IFA tillage chairman Noel Delany maintained it was difficult to get a handle on conacre prices, adding: "Auctioneers are trying to push prices up and there will be competition from dairy farmers expanding, but €120/ac is the maximum farmers could pay for land in an average year."

Irish Independent