‘Phenomenal’ demand for land
Auctioneers working in Cavan have said they are experiencing increased demand for land available for rent. Robert Nixon, who is an auctioneer based in Kells and deals with land in Meath and Cavan, says January 2023 was his busiest January on record.
“There is a phenomenal demand for land. I’m a long time in business and it has never been as busy in January since I opened.”
According to Robert, this demand is being fuelled by new nitrate regulations,which are forcing farmers to take on new land.
“Dairy farmers are facing restrictions with nitrates on their farms. They have to either increase their land base compared to last year or cut back on cow numbers.
"Milk prices were so good for the last few years, that many don’t want to cut back on numbers. If a farmer is geared up for 150-200 cows, then they don’t want to lose 20 cows. Instead, they have decided to take on more land and that has been driving the land prices up,” explained the auctioneer.
According to Robert, this is putting pressure on other farm sectors to compete with dairy farmers.
“This increase in demand is causing dry stock farmers to compete because, if they have lost leased land somewhere else or a different farmer has taken back a farm from them, they have to compete with high prices because they are in a similar situation with nitrates they have to get land as well,” he said.
Another factor increasing demand for land is increased investment by business people.
“Investors are buying farms. We recently sold a farm at Enagh near Virginia - a 90-acre farm that was originally a dairy farm, residential farm with extensive buildings,for €1.45 million. It was bought by a businessman and the underbidder was a businessman with farming interests.
"They are investing in land because the income on land is tax-free if they put it on a five-year plus lease. That’s very attractive for them in comparison to investing in residential property,” he outlined.
Robert says farmers are unable to compete with these prices.
“This is pricing some farmers out of the market in the purchasing of land. Farmers are not able to compete with business people, who are investing to earn tax-free income.”
Robert says that land lease prices vary between Meath and Cavan.
“We’ve leased a couple of farms at €450 per acre. The usual price is from €350-€450 in Meath and in Cavan it’s around €300 an acre. A big parcel might cost a little less, depending if they’re near to a dairy farmer, who will give more and use it for silage or grazing.”
Robert says most land leases will be finalised over the coming weeks, which could leave some farmers short of land for the coming year.
It’s going to be all done and dusted in the next few weeks, it will mean some people won’t be able to source land. If people aren’t able to source land, it’s not too bad if they have cattle because they can sell them because cattle prices are very high at the moment, sheep prices aren’t doing well, store cattle are extremely dear."
He also predicts high prices are here to stay for now.
“I think land prices for letting are going to hold up for this year, there’s far more demand for land than there is available land. The phone never stops ringing with people looking to rent land. As soon as we advertise land for rent, it gets a lot of attention.”
Lindsey Reilly of Liam Reilly Auctioneers says that recently land prices have been pushed past the point of affordability for some farmers.
“Last year, we advertised land and it made more than more than you'd normally think was feasible for the farmers. The land was there but they had to pay if they wanted it. Before land made €150 to €200 per acre, and now it’s going as far as €300 per acre.
Meath land was always more than Cavan and made up to €300 per acre, but we’re reaching that price now. Anyone letting land won’t take prices like €150 per acre anymore.”
Lindsey says that young farmers entering the system are also impacting the price of land.
“Young farmers are entitled to different schemes, and they are getting top-up entitlements from the national reserve. They could pay more for land because they were entitled to more subsidies than the regular farmer who gets an area aid and entitlements.”
She says some farmers are potentially being forced to cut their herd sizes as a result of the demand. “Lots of people come into us who have been bidding for land but don’t get it. We don’t know what they do if we can’t sort them out with any land. Some might have to go without the land and end up cutting back on a stock number if they don’t get it.”