SCSI auctioneers and valuers are forecasting that the price of agricultural land nationally will increase by 8% on average this year, underpinned by a strong dairy sector. In a major new survey, auctioneer, and valuer members of the Society of Chartered Surveyors Ireland (SCSI), operating in the agricultural and rental markets say they expect national rental prices to increase at an even higher rate – an average of 14%.
They say prices will be driven by the constrained supply of land for rental and higher anticipated demand, particularly from the dairy sector due to new environmental regulations. However, experts from Teagasc note that milk prices have fallen back somewhat this year. National average non-residential farmland prices in 2022 ranged from €5,564 per acre for poor quality land – up 5% from €5,308 in 2021 – to €11,172 per acre for good quality land – up 2% from €10,962 the previous year.
Teagasc economist, Dr. Jason Loughrey, said Russia’s invasion of Ukraine is continuing to have a major impact on agricultural markets, at both international and domestic levels.
“As in many other countries the invasion resulted in higher energy and fertiliser prices for farmers here in Ireland, and these have remained at elevated levels despite some modest declines in recent months. 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.”
The main findings:
- National farmland prices forecast to rise by 8% on average in 2023
- National average non-residential farmland prices in 2022 ranged from €5,564 per acre for poor quality land to €11,172 for good land
- Overall, the most expensive land is in Kildare where good quality land is fetching an average of just over €15,000 per acre
- The cheapest is in Mayo where poor-quality land is selling for an average of €2,866 per acre
- SCSI agents expect national rental prices to increase by 14% this year
- Last year average land rental prices in Munster and Leinster increased by 13% and 9% respectively
- Agents say land prices and demand for land will continue to rise mainly due to the dairy sector and low supply of land for sale
- While significantly higher margins are forecast for cattle rearing farms, 2023 will prove challenging for sheep and tillage farmers
- Input costs which increased dramatically following Russia’s invasion of Ukraine are expected to remain at elevated levels in the short-term
The full report is available to download here