The average price of agricultural land is forecast to increase by 8% on average this year, according to a new survey.

The Agricultural Land Market Review and Outlook Report 2023 published today (Tuesday, April 25) by the Society of Chartered Surveyors Ireland (SCSI) and Teagasc also shows that national rental prices are expected to jump by 14%.

Agents said that prices and demand for land will continue to rise mainly due to the dairy sector as it seeks to comply with changes to the nitrates regulations, along with a low supply of land for sale.

The data is based on responses from 134 SCSI members from around the country who completed the survey in January and February.

Land

According to the report, the volume of land sold last year was similar to 2021, with executor/probate sales providing the main source of farmland sales.

Average non-residential farmland prices last year stood at €5,564/ac for poor quality land, which is up 5% from €5,308 in 2021.

While the average price for good quality land was €11,172/ac, up 2% from €10,962 the previous year.

According to this year’s survey, the most expensive land is in counties Kildare, Meath and Waterford.

Good quality land in Co. Kildare across different plot sizes fetched an average of €15,056/ac.

On average, the most expensive land recorded was in Co. Waterford (50-100ac) where good quality land was €17,400/ac.

Co. Mayo recorded the lowest value for farmland in 2022 at €2,040/ac for poor quality ground on holdings over 100ac.

Click on the map below for a county-by-county breakdown of the average price per acre of non-residential land on holdings under 50ac in 2022:

In Leinster, prices for good land in 2022 on holdings of less than 50ac range from Co. Kildare’s high of €15,333/ac, which is similar to last year, to €11,500/ac in Co. Offaly.

The prices for poor quality land range from a high of €9,417/ac in Co. Louth to €6,000/ac in Co. Longford.

Looking to Munster, the prices for good land on holdings under 50ac span from Co. Waterford’s €15,000/ac to €8,813/ac in Co. Clare.

The prices for poor quality land ranged from an average of €7,750/ac in Co. Cork to €4,125/ac in Co. Clare.

In the Connacht/Ulster region, the survey shows that prices for good quality holdings under 50ac ranged from an average of €12,143/ac in Co. Donegal to €6,140/ac in Co. Leitrim.

In the case of poor quality land prices were between €5,375/ac in Co. Galway to €3,300/ac in Co. Leitrim, the lowest price in the country for holdings under 50ac.

The survey also shows increases across the country in the prices being achieved for rented ground.

Rental values in Munster increased on average by 13% last year, with prices per acre ranging from €241/ac for grazing only to €383/ac for potato crops.

Rental values in Leinster grew by 9% on average in 2022, with grazing ground standing at €248/ac and potatoes coming in at €439/ac.

In Connacht/Ulster, grazing, meadowing and silage ground increased by 5% to €176/ac, while there was a 1% increase for grazing only to €162/ac.

Survey

Chair of the SCSI’s Rural Agency Committee, Peter Murtagh said that 83% of agents believe there will be an increase in demand from dairy farmers to buy land this year.

He said that changes to the European nitrates directive will also have a particular impact on rental prices.

“Approximately 88% of agents expect the volume of farmland available for lease this year will either remain the same or increase, up from 62% last year and this is positive for the market given the constrained land supply situation,” Murtagh said.

Teagasc economist, Dr. Jason Loughrey, said that the war in Ukraine is still having a major impact on agricultural markets.

“The increased cost of many key inputs was a major concern throughout 2022, but these were counterbalanced by record milk prices and by significantly higher grain and meat prices.

“However, the price output picture this year is more difficult. For example, milk prices have declined from their record levels and while still high by historical standards, the average net margin per litre is set to fall below 15c this year.

“While a modest overall increase in milk production is forecast, recent changes to the nitrates directive will limit the extent of any growth,” he said.

ICSA Beef Factory IBLA Food Vision Beef and Sheep Group Irish

Dr. Loughrey said that beef and pork prices are predicted to be higher this year, with margins and incomes on cattle-rearing farms predicted to rise significantly.

However, the margins on sheep farmers are anticipated to fall this year, while the futures markets for tillage indicate significant declines in output prices at harvest time.

“Based on those projections, the expectation is that cereal-based net margins will be negative on approximately 50% of specialist tillage farms this year,” he said.

The economist said that competition for rented ground will further increase land rental prices for tillage farmers in 2023.

“Our analysis indicates that the impact of the [dairy] banding policy on the agricultural land rental market could be highly dependent on the farming structures in a locality.

“Approximately one fifth of all dairy farms operate in the highest banding category, and this is where much of the additional demand for rented land is currently emerging,” he said.

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