Dairy leading the way, but other sectors strengthening their hand
Dairy farmers had another very good year in 2023, so it's no surprise that demand for dairy land is soaring.
Dairy farmers are the ones who seem to be leading the way in terms of those looking for good-quality grassland. Good quality pasture speaks for itself. It answers any questions about the subsoil straight away by looking at it and walking the land.
Dairy farmers had another very good year in 2023. While it wasn’t the great year that came before it, it was still a strong enough year, with many farmers’ war chests having been filled from the previous two years.
“From what I’ve seen, the dairying sector is the one that is really making an impact in terms of demand,” says Éamonn McQuinn of Tralee-based McQuinn Consulting. “Even with the drop in milk prices recently, the demand is still strong… the other thing is that nearly all buyers are cash buyers – sometimes from the Kerry shares – but with the way interest rates are at the moment, people are scared stiff to go borrowing money so they’re using cash reserves in most cases.”
That demand is reflected in the prices being paid for land but also in the very strong prices now being paid for leasing. The normal price of €300/acre from a couple of years ago, he says, has now shot up to over €400/acre and is pushing towards €500/acre in some cases.
“We had a few farms for rent earlier in the year and they’ve all leased for between €400 and €500 per acre,” says Éamonn. “I’ve never seen demand like it.” “We’re also seeing more and more cattle farmers who have finally been getting a lift over the last while,” says Andy Donoghue of Clonakilty-based auctioneers Hodnett Forde Property Services.
“The last two quarters have seen reasonable rises in factory prices and you’re seeing the kinds of cattle farmers that wouldn’t have looked at something for sale over the last two years, now showing a bit more interest in the agricultural land market… the part-time farmer/suckler/beef farmer is back on the market again for the slightly smaller holdings.
“Some people will invest in land at a lower level and put money into it but the strong demand is from productive farmers who want property acreage which is ready to go.”
According to Matt Ryan of Matthew Ryan & Son in Tipperary Town, property prices have remained strong in the last six months, with the dairying sector doing all the driving. One of his more notable sales was a 77-acre farm that sold for €1.3 million at auction in March. He has seen a slight easing of values in some areas, however.
“That said, the right properties are making good money all the time,” he says. “For good ground, you’re still making between €15,000 and €20,000 per acre… and we had one exceptional piece of ground that made €24,000/acre. But interest rates are probably starting to impact on the land prices to some degree.”
Brian Gleeson at Brian Gleeson Property has been active selling land in East Cork & Co. Waterford and reports strong appetite for quality agricultural holdings; much of it driven by the dairying sector too, despite it having a less successful year.
“We've had a busy selling year, with all stock sold,” says Brian, “and record prices achieved including just shy of €24,000/acre for a 53-acre holding for prime land in Lismore, Co. Waterford. We currently have a number of in-funds clients looking for quality holdings from 40 to 150 acres in the East Cork/West Waterford area… despite the reduction in the milk price, there still appears to be an insatiable demand for land.”
