INTENSE farmer competition for good quality land drove the Cork letting market in 2015, with a marked increase in the area of land leased.
A massive 60pc lift in the volume of land lettings has been recorded this year by Clonakilty-based auctioneers Hodnett Forde Property Services. The marked expansion in business reflects continued land market buoyancy, as well as farmer confidence in the agri-sector, despite price difficulties in both dairying and tillage.
Company directors, Ernest Forde and John Hodnett, said strong demand for good quality grassland and cereal ground had been a feature of the trade this year. Expansion in the dairy and tillage sectors, a welcome bounce in cattle prices and CAP entitlements for new entrants were identified as the main factors driving the hunt for land.
‘In the west of the county, we had a number of genuine customers for every parcel of grazing ground that came on the rental market,’ Mr Hodnett said. ‘Expanding dairy farmers set the pace in terms of price, and they were certainly the prime costumers for grass lettings.’
While milk prices have been under pressure since midsummer, Mr Hodnett forecast that growth in the dairy sector will continue to underpin grass lettings into the future.
‘Land access is the new quota in dairying. And farmers are willing to pay a premium if they can get their hands on ground adjacent to the milking platform or land for silage and replacements that frees up ground closer to home,’ Mr Hodnett explained.
Interestingly, the dairy sector also influenced activity in lettings for cereals: ‘Demand for ground for fodder, particularly beet and maize, really pushed the price for cereal lettings in some areas,’ Ernest Forde said.
‘Some cereal growers are now contract growing feed for dairy and beef farmers and this has had an impact on the land market in the south and east of the county,’ he added.
This year, letting prices for grazing and tillage ground ranged from €150 per acre to €320 an acre, depending on the quality of the land. The outlook for the year ahead remains positive.
Mr Forde pointed out that significantly more land was tied up this year in long-term leases. The incentives now available for longer rental arrangements enable landowners to earn a tax-free income of up to €18,000 for leases of five to seven years, €22,500 for those of seven to 10 years’ duration, and €30,000 for deals of between 10 and 15 years.
‘We have arranged long-term leases for clients all over the county this year and we see these leasing arrangements becoming increasingly popular with landowners,’ Mr Forde said.
‘Hodnett Forde has developed a reputation for these leases because we have experienced staff that will draft agreements on behalf of property owners and then manage the leases on an annual basis,’ he added.
‘Kathleen Russell and Bernice O’Neill are well known and respected in the farming community for their experience and knowledge in this field,’ he said.