Irish Agricultural Land Prices Set to Rise Amid Recovery in Milk Prices and Sustained Demand
Source: The DairyNews
The Society of Chartered Surveyors Ireland (SCSI) has released projections indicating a 6% national increase in agricultural land prices this year, largely driven by an anticipated recovery in milk prices and ongoing robust demand from farmers and investors. The projections were part of a comprehensive survey conducted by SCSI members involved in the agricultural sales and rental market.
The survey also forecasts a 4% average increase in rental prices for 2024, with regional variations showing a 7% rise in Munster and a 6% increase in Connacht/Ulster, while Leinster anticipates a slight 1% decrease in average land rental prices.
In 2023, land rental prices saw significant increases, especially in Munster, where grazing land prices surged by 23% and cereal crop land by 9%. In contrast, Leinster and Connacht/Ulster experienced minor changes in most land types.
The escalation in prices continues to be propelled by high demand and limited supply, although the pace of increase is expected to moderate due to factors such as higher interest rates, poor weather conditions, and lower farming returns. Teagasc has expressed concerns over the impact of adverse weather on agricultural output and costs, adding a layer of uncertainty for this production year.
The survey also highlighted the disparity in land prices across different regions and land types. For example, Waterford reported the highest prices for good quality land under 50 acres at €20,000 per acre, while Mayo had the lowest for poor quality land over 100 acres at €2,733 per acre.
James Lee, a member of SCSI’s Rural Agency Committee, commented on the market dynamics, noting that while demand fr om dairy farmers drove land sales and rental price increases last year, expectations for 2024 have been tempered due to various economic pressures affecting farming. He explained that in regions like Munster, wh ere dairy farming is prevalent, rental values rose significantly due to the need for dairy farmers to adjust their stocking rates to meet environmental regulations.
Looking ahead, SCSI anticipates a modest national increase in rental values of 4% this year, with a more pronounced increase in Munster due to the dairy sector's resilience. Meanwhile, land values are also expected to rise, continuing the trend from last year but at a reduced rate of 6% nationally, reflecting a more cautious market outlook amidst economic and environmental challenges.
In 2023, land rental prices saw significant increases, especially in Munster, where grazing land prices surged by 23% and cereal crop land by 9%. In contrast, Leinster and Connacht/Ulster experienced minor changes in most land types.
The escalation in prices continues to be propelled by high demand and limited supply, although the pace of increase is expected to moderate due to factors such as higher interest rates, poor weather conditions, and lower farming returns. Teagasc has expressed concerns over the impact of adverse weather on agricultural output and costs, adding a layer of uncertainty for this production year.
The survey also highlighted the disparity in land prices across different regions and land types. For example, Waterford reported the highest prices for good quality land under 50 acres at €20,000 per acre, while Mayo had the lowest for poor quality land over 100 acres at €2,733 per acre.
James Lee, a member of SCSI’s Rural Agency Committee, commented on the market dynamics, noting that while demand fr om dairy farmers drove land sales and rental price increases last year, expectations for 2024 have been tempered due to various economic pressures affecting farming. He explained that in regions like Munster, wh ere dairy farming is prevalent, rental values rose significantly due to the need for dairy farmers to adjust their stocking rates to meet environmental regulations.
Looking ahead, SCSI anticipates a modest national increase in rental values of 4% this year, with a more pronounced increase in Munster due to the dairy sector's resilience. Meanwhile, land values are also expected to rise, continuing the trend from last year but at a reduced rate of 6% nationally, reflecting a more cautious market outlook amidst economic and environmental challenges.
