Farm Ireland

Tuesday 24 October 2017

Land letting heats up as tax breaks take hold

Demand soars despite poor grain prices and rising fertiliser costs

Grain farmers are looking to put plans in place
Grain farmers are looking to put plans in place
Louise Hogan

Louise Hogan

The market has hotted up for land letting weeks ahead of schedule, with tillage farmers leading the charge despite poor grain prices.

New greening and crop rotation requirements under CAP mean many grain farmers are looking to put firm plans in place to schedule their planting requirements.

"The land letting season has kicked off," said auctioneer Stephen Barry. "Most tillage men forward sold grain and are trying to plan their crops to fit in with greening and crop rotations."

"Sometimes I think I'm working in a parallel universe. I would have expected the opposite as the prices of grain are not good," he said.

It comes as farmers deal with slumping grain prices, while they face higher costs with a €12/t rise predicted for CAN fertiliser prices.

Mr Barry, from Raymond Potterton auctioneers which lets land in Westmeath, Cavan, Louth and Co Dublin, said the market is already in full swing four weeks ahead of normal.

However, this year he reported the new tax concessions have seen more farmers push for five year or longer leases rather than conacre leases.

Most are paying around €180 to €200 an acre for tillage ground for winter crops, with land that is also suitable for a potato rotation commanding around €240 to €250.

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"Crop rotation is causing demand for five year leases and seven years if possible," he said. "We didn't see the effect of crop rotation last year but it is a month earlier than other years"

Agricultural advisor Richie Hackett said demand was stronger for 'naked' land without entitlements. However, he said many thought the prices for land letting would fall last year but prices were maintained.

Mr Hackett said there was stronger interest in the longer leases this year.

"It is a market that makes no sense - there is no logic to the land market," he said. "The prices of land letting is far too dear, an awful lot of it defies logic," he said. "Paying €200 for land and expecting to make money is a non-runner," he said, adding it would take 1.5t to simply repay the rent.

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