As we move further into spring, most farmers will have a good handle on the area they will be farming for the year ahead. Most of the new land that comes up for lease tends to appear on the market in the first quarter of the year but, in recent years, since the advent of tax incentives to encourage long term leasing, less new land has come on the leasing market. With so much ground tied into leases ranging from five to 15 and even 20 years in some cases, when new ground becomes available, it is in increased demand. Tommy Moyles speaks to auctioneers around West Cork to get the lowdown on the land market.
Where the final price ends up at tends to depend on location, land type, level of farming activity on the land’s boundaries and the type of enterprise. For example, if land comes up for lease in a very active dairy area and it is convenient for a neighbouring farmer to walk cows to, then it is likely to veer towards the upper end of the rates that are available.
The increased prominence of the nitrate’s derogation is a major influencer on the land rental market in West Cork. Dairy farmers in particular have required more land to carry the same number of stock they had prior to when changes in stocking rates came into being.
In the main dairy areas especially, this has resulted in land rental rates increasing. Some land owners who would have reared stores or calves, are now looking at how lucrative it is to rent out their land instead. This is more notable but not confined to farms under 40 acres.
Dunmanway-based auctioneer, Daniel Lehane said: “If it’s good grassland that is versatile and you can get a mower into it and cut silage, it is €300/ac to €400/ac for good ground that can be mowed for silage. What we’re noticing this year is a lot more beef farmers that are active enquiring for land or taking it. Dairy farmers were always active but beef price is up and they are very active this year. It’s great to see them being rewarded.
More marginal ground suitable only for grazing or rough grazing is below that level and there is less and less demand for that, especially the rougher ground.”
Andy Donoghue of Hodnett Forde Property Services Clonakilty reported similar.
“We’re seeing a lot of ground go for €300/ac to €450/ac depending on where it is and who is around it. You’d expect higher in a dairy area if there were a few interested. The higher money tends to be for the longer leases too and an odd few will go to €500/ac but tend to be when there is a good yard, modern milking facilities, slurry storage and a long-term lease.”
Raymond O’Neill of Sherry Fitzgerald O’Neill who have offices in Bantry, Clonakilty and Skibbereen reported a similar trend.
“There’s not much new ground coming on the market and the general run we’re seeing is €300/ac to €400/ac being paid for grass ground where you can get silage off it. There’s less on ground that wouldn’t be as good and if there is a good yard there could be a bit more paid too.”
The demand for that good ground, especially non-residential blocks, is from farmers looking to use an outside farm for rearing young stock and supplying silage. It’s not solely in demand from dairy farmers either.
In the western part of the region, Raymond O’Neill said: “We’d see a share of farmers from the Beara peninsula who would be on the lookout for land too and they would travel a bit to secure silage ground or a bigger grazing block.”
He also has a new piece of ground coming on thew market for a short lease.
“We have a new let on the market now consisting of 30ac of tillage ground in Barryroe for a one year let. It’s part in beet and the rest was growing grain. That will be a good test for the market.”
Not all leases are hitting those prices and in particular where neighbours are involved or if there is land rented with a family connection, prices tend to be that bit under market value.
Daniel Lehane said: “We’re still seeing leases under that level, in particular where there is a family connection or the relationship is good between the tenant and the land owner or where neighbours are involved. When these are being renewed, they might go up a small bit in price but where both parties are familiar with each other, they can view that as being more important than getting a bit more for the ground.”
“My advice to any tenant is to look after the place, keep it well-fenced and mind it.”
He added, “We’re often seeing it that where the relationship between tenant and landlord is good, those leases are being renewed. There’s peace of mind for both parties. A farmer leasing the land can plan ahead for their business for the term of the lease whether that is five, seven, 10 or more years. It also gives certainty to the land owner who knows they are guaranteed income for that time and also know their holding will be looked after well.”
Echoing a similar sentiment, Andy Donoghue said: “You’d also have a number of leases that would be completed off market where a neighbour who is stepping back from farming would have someone in mind that they’d like to see farming their land. Land owners are becoming much more conscious of who is renting their land and want someone to look after it.”
Renewals have been a major part of all three auctioneers’ businesses on land rentals but Daniel Lehane also has noted an increase in leases where a farmer has formed a company.
“What we’re doing a lot of now are leases where a company is leasing the land. For example, where a farming family come together to form a limited company, even though as individuals they own the land, because they are a company, they have to have a lease drawn up for it, so we’re seeing more of that now.”
