Farm Ireland
Independent.ie

Thursday 18 January 2018

Warning on €200/ac bids for conacre

Caitriona Murphy

Caitriona Murphy

Conacre prices are still averaging close to €200/ac in many parts of the country, despite warnings from agricultural advisers that farmers will lose money at these levels.

A desire to maximise Single Farm Payment (SFP) entitlements over the coming seven years continues to drive demand in a repeat of last year's heated market.

The maximum amount of land a farmer will be able to claim on over the next seven years was based on what was submitted in 2013. However, the value of the entitlements will be based on the total value of each farmer's SFP in 2014.

Prices in excess of €200/ac were commonplace in parts of Tipperary, Cork, Wexford and Carlow last year, but some farmers paid out much more to over fears that it would affect their SFP until 2020.

"Last year €200/ac was close to the average here in Carlow, with a lot of farmers paying €225-230/ac," said local auctioneer John Dawson. "I suspect that this year prices may be on a more even keel."

In Wexford, Denis Howell said he was expecting conacre to settle closer to €200 this year, with €250/ac being the upper limit.

"Prices were a bit false in some areas last year because of speculation about CAP, but I would expect it to be closer to €200-250/ac this year," he maintained.

Maynooth auctioneer Sean Doyle has re-let 500 acres so far, with private deals ranging from €170/ac to €200/ac.

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"There is plenty of 'want' for tillage land at the moment and even though the farmers are trying to put downward pressure on prices, they don't want to lose the land," he added. "They will pay what they paid last year rather than lose their maps."

Laois auctioneer John Hennessy said farmers seeking land to grow winter barley were anxious to hold prices in the range of €130-200/ac in the Stradbally area.

In south Tipperary, John Stokes, of Stokes and Quirke, said he could not see conacre prices falling from the 2012 level of €150-200/ac.

"There's lots of demand from big tillage men who want to get on and get the work done for winter corn," said Mr Stokes. "They see a certain economy of scale in having more land for their equipment."

GRAIN

However, agricultural consultant Pat Minnock dismissed the notion there was any economy in paying high prices for conacre at current grain prices.

"At a price of €150/t for spring barley, you would need to grow 2.7t/ac to break even on your own land," he said. "If you pay €150/ac for conacre, you need to grow 3.7t/ac just to break even."

At a winter wheat price of €160/t, farmers need a yield of 3.3t/ac to break even on owned land and if they paid €160/ac for conacre, the breakeven yield would increase to 4.3t/ac.

"Anyone paying over €200/ac has to be losing money," insisted Mr Minnock. "I have yet to find a calculator that can justify what farmers pay for conacre."

Teagasc tillage adviser Ivan Whitten added that current barley prices of €150/t would not leave any room for expensive conacre this autumn.

"Accounts are only being settled now and a lot of lads are realising just how little is left after the harvest," said the tillage adviser. "On mixed farms there are still meal bills outstanding since the spring."

Irish Independent