Hunger for farmland at same high levels as 2023
Farmland is attracting investment from all sides presently, ranging from dairy farmers to successful business people.
Land prices in all agricultural sectors are continuing to increase and the rise appears to show no signs of stopping.
The war in Ukraine continues, the prices of inputs in the agricultural industry are still high but have largely stabilized. The same influences on the price pressure are still there but with some subtle changes to the rollcall of players.
“It’s a continuation year on year,” says Andy Donoghue of Clonakilty-based auctioneers Hodnett Forde Property Services. “It’s all about supply and demand. The supply hasn’t changed significantly and the demand is definitely there and there have still been some headline figures during the year.
“Thankfully, the input prices have settled even in the last few months, we’ve seen the price of diesel come down a small bit. We’ve seen the cost of raw ingredients and fertilisers come down. They’re now at a level where they were 2½ of 3 years ago. Milk prices are still quite static so farmers can still operate within these margins.”
As farm holdings continue to grow in size, an increasing trend has been for farms to transfer into company names rather than names of individual farmers — perhaps evidence of fiscal prudence as well as another indication of the continuing industrialisation of our farming sector.
“The start of the year was stronger with leasing prices,” says Midelton-based auctioneer David Keane, adding that while demand generally levelled off after that, it was a busy year from a sales point of view, with demand for land purchases remaining strong throughout the year. “There’s quite a bit of land tied up in leases but demand for it is still strong.”
“We had a busy year to date,” says Pádraic Murtagh of Mullingar-based James L Murtagh & Associates. “We had a lot of transactions in May, June and July in Offaly, Westmeath, Meath, Longford, Cavan and Galway.”
The agent’s central location offered an interesting geographical perspective covering three provinces and Pádraic has also found a vibrant market in the last year that has continued to see demand in spite of market conditions that appeared challenging.
And yet, most observers can’t help but get the feeling that we are at a crossroads of sorts. Is it the feeling that prices simply cannot go much higher?
Or is it the feeling that we are at a certain point in a cyclical economic movement; one where the next stage in the cycle will involve a downward movement of demand?
According to Mike Brady of Cork-based Brady Consulting, the mood amongst the farming community is far from bullish.
“At the ‘trophy property’ end of the market, the money is still there for the €10-million or €15-million-euro farms and they’re still selling away,” says Mike. “At the complete other end of the market, it’s a bit different. Anything up to €300,000 is easy enough to shift because a lot of people have that kind of money, but the properties between €300,000 and a couple of million euros are a bit more difficult to sell.
“It’s because farmers are not in a good space, mentally, at the moment. We’ve had a bad year weather-wise. 2023 was a poor year from a profitability point of view, having come off a really good year in 2022. While this year has been better, it hasn’t been great and we need a good back-end to the year for it to end up as an average kind of year.
“The mood, therefore, has been poor. Anyone in the lending institutions will tell you that there’s very little activity — from the point of view of buying tractors or investing in expansion of their operations. They’re keeping their powder dry.”
