Exclusive results from the Irish Farmers Journal Agricultural Land Price analysis shows that the amount of land offered for sale during the first six months of 2012 was up 65% on the same period last year. The analysis also indicates that the average price paid was €10,004/acre - up 8% from the €9,254/acre achieved for the first six months of 2011.
It was clear from an early stage that the volume of land coming to the market would be well up on last year.
A flush of land arrived on the market in February and March (compared with May the previous two years) and this trend has continued right into July, August and September. Just over 34,000 acres were offered for sale from January to June, compared with 20,600 for the same period last year.
Interestingly, there was an increase in the number of bigger parcels offered, with the average farm size being 56.5 acres (compared with 43.2 acres the previous year).
Executor, pressure, receiver, retirement and re-location sales, coupled with active demand from local farmers, all combined to generate one of the best seasons for activity in the agricultural land market over the past four years.
This was reflected in a notable increase in the success rate at auctions, with 52.5% of properties selling under the hammer; this figure generally ranges from 35% to 40%.
However, despite the surge in supply, average prices remained steady throughout the country and, in some regions, possibly increased by €2,000/acre.
It's the first time in three years that the average has hit the €10,000/acre mark - the full year average for 2010 and 2011 was €8,700/acre - with a higher, but not substantial, incidence of €12,000 to €15,000/acre in some areas.
Local and neighbouring farmers were the main drivers of the land market this spring and, in part, their enthusiasm to buy land stemmed from the positivity surrounding farming last year. Looking to the current situation, adverse weather, coupled with falling beef, lamb and milk prices, has changed farmer mood in recent months and, perhaps, generated a slight lull in specific areas.
It certainly hasn't affected supply, though, with a flush of land arriving to the market in the past fortnight.
Source: Argentine Beef Packers S.A.
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