Prime arable farmland, like the market in general, noted a 1.7% overall reduction in the first half of the year according to the Irish Agricultural Land Market Review by Sherry Fitzgerald.
The report stated that prime arable land recorded a 0.9% reduction in value in quarter two of this year.
This follows a 0.8% decline in the preceding quarter, bringing the total reduction in value since the start of the year to 1.7%. Comparatively, prices reduced by 0.8% in the opening half of 2019.
In the 12 months to June 2020, prices fell back at a slightly greater level, falling 3.7% in the period which is represented below.
Image source: Sherry Fitzgerald Research
This compares with values which rose 0.3% in the second quarter of 2019. As a result of the reduction in value, the price of prime arable land in Ireland, excluding Dublin, on a weighted basis, stood at €10,600/ac at the midpoint of 2020.
This was slightly more expensive than the mid-east at €12,450.
The south-west was the only other region in the country where values exceeded €12,000/ac. Prices for prime arable farmland remain the lowest in the west at approximately €7,000/ac.
Lower cereal yields
In their mid-year review of 2020, Teagasc noted that adverse weather conditions would likely result in lower cereal yields compared to 2019.
Teagasc did expect this would be offset somewhat by reduced production costs and increased harvest prices, although it was unsure if this would fully counterbalance the decrease in crop production.
Overall, Teagasc has forecasted a slight decrease in farm incomes for tillage farmers in the year.