Expected farmland price rises could be tempered by US tariffs this year

Irish Times

29-04-2025

The cost of agricultural land in Ireland is forecast to rise by 6 per cent this year, as increased demand from the resurgent dairy sector is expected to outstrip supply, says a report that also warns, though, that
US import tariffs
could 'temper' that increase.
The report, by state agency
Teagasc
and the
Society of Chartered Surveyors Ireland
(SCSI), also forecasts that rental prices could increase by 7 per cent this year.
While better milk prices are expected to drive demand for land, that will be encouraged by recent changes to Ireland's Nitrates Action Programme – which will require some farmers to increase their land size to meet lower stocking rate thresholds – say SCSI auctioneers and valuers.
'Dairy farms are projected to have a robust 2025 and will continue to significantly influence the demand for both owned and leased land,' Frank Harrington, chair of the SCSI's rural agency committee, said.
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'Over three quarter of respondents to our survey (77 per cent) ranked dairy farmers as the main buyer type of agricultural land,' he also said, pointing to 62 per cent of respondents expecting an increase in demand from dairy farmers in 2025.
However, Mr Harrington pointed to 'uncertainty in the global economy' and US import tariffs on
European Union
agricultural products, which are casting a 'long shadow' on the market.
'While it's impossible to predict the outcome and potential impact, it's clear these factors could introduce volatility into the land market and may temper some of the upward price momentum,' he said.
Last year, the national average price for good quality land grew by 7 per cent to €13,178 and poor quality land prices grew to €6,636 per acre, up 6 per cent.
The report found that the national average value of non-residential farmland in the State now stands at €9,907 an acre, an annual increase of 7 per cent.
A 'significant variation' in farmland values exists across the provinces, the report says, with an average price per acre of €11,809 in Leinster, just ahead of Munster which had an average price of €11,120. In Connacht/Ulster, however, there is an average price of just €6,792 an acre.
The most expensive land was in Waterford, where good quality land on holdings between 50 and 100 acres rose to an average sales price of €23,500 an acre. Mayo recorded the lowest land sales prices in the State where poor-quality land on plots larger than 100 acres stood at €3,075.
The low supply of land was found to be one of the main factors behind the price rises, which in turn are being driven by succession planning issues in the 'ageing' farming workforce. The average age of farmers has risen to 59 years and the report found only 4.3 per cent were under 35 years.
The report gave a positive outlook for the agricultural sector as the improvement of output prices for livestock and milk which began in 2024 has continued into this year.
Following a challenging 2023, strong price increases for milk and lamb were met with decreased input costs last year, Teagasc economist Jason Loughrey said.
This trend has continued into 2025, he said, but he warned that the weakening of the US dollar relative to the euro had 'negative implications' for exports. The exchange shifts could, he said, have 'positive implications' for imports of key agricultural inputs such as feed, fertiliser and energy.