Farm Ireland

Wednesday 21 February 2018

Quota triggers bidding war

Jim O'Brien

Jim O'Brien

A premium of more than €190,000 was paid for a dairy farm in north Meath last week when two southern milk suppliers battled it out for the property.

Given that the lands were sold with a 363,000l (80,000ga) quota, the value of the milk pool equated to almost 53c/l.

A huge crowd turned up at the Headfort Arms, Kells, Co Meath, for the auction of the 109ac dairy farm.

When the gavel came down, a 79ac lot along with the milk quota was sold for €745,000, while a 30ac parcel was withdrawn at €200,000.

Despite the failure to sell the second lot, Ronan McKenna of selling agents, Raymond Potterton Auctioneers, said the vendors and the agents were happy with the sale of lot one, which was bought on behalf of a southern dairy farmer.

Mr McKenna said an examination of the figures showed that the quota made a real difference to the sale price.

"We went into the auction with a guide price of €7,000/ac but the 79ac section made more than €9,430/ac, which means the quota added €2,430/ac or €192,000 to the selling price," he said.

The farm is in the townland of Colnahinch, Moynalty, Co Meath. It is three miles from Moynalty village and eight miles from Kells. Prior to the auction, the interest shown by prospective customers from the dairy sector indicated the milk quota would add considerable value to this farm, which in itself is a fine property.

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Laid out in paddocks and serviced by a good internal road network, the non-residential farm is well maintained. It comes with substantial road frontage and a fine farmyard that includes two slatted sheds with feed passages and cubicles, two silage pits, a milking parlour in need of attention and some traditional stone buildings.

The property also has full planning permission for the construction of a bungalow.

The auction opened when bids were sought on the 79ac and the quota. Four bidders showed immediate interest and in bids of €20,000 the price on offer soon reached €700,000.

At that point the lot in question was put on the market and bidding continued in increments of €5,000 until the final bid of €745,000 won the day.

It is believed the final two bidders were southern dairy farmers, with the successful purchase being completed by an agent acting for one of the parties.

Lot two comprised 30ac and was described as inferior to the ground in lot one. It was withdrawn at €200,000 after five bids, but active negotiations are under way to secure the sale of this section. Lot three, the entire, was put to auction with offers in excess of €900,000 sought but no interest was expressed.

Indo Farming