Agricultural land price

TUBBY

Hi all.
I would be interested in yer opinions on this. What is the actual price of agri land now and has it bottomed out or will we see a real bottom out when the SFP/ Disadvantaged Areas and REPS etc are cut or minimised.

there still seems to be money in the country judging by that auction in the Shelbourne Hotel a few weeks back.

My opinion is that agri land now is generally running at 7K per acre and a site on it makes no difference to value. Think it will fall further though.

ihatetractors

5k in the next ten years,
few dairy men will be purchasing as they're mostly carrying debts from increasing in herd sizes, sheds etc... and they'll only purchase neighbouring land imo.
1st generation to ever leave the land, sad to think this way, but how many 30/40/ even 70 acre farms are there with the old father of 60 or maybe more farming alone, some will go farming, some will be sold as this tie to the land has been broken.
SFP, how many inefficient farms are being kept afloat by it?? how many farms is it 50% or more of income, and it's only going down in value.
Economies of scale, there'll be less income per acre due to higher costs over next number of years, higher prices doesn't mean higher incomes......
Land will be sold for what can be made off it, not just for what the bank will give, age of cheap credit, little or no security is LONG gone.

johngalway

Price of Ag land is too high. The cost of servicing loans needed to purchase leaves little room for improving or running a farm IMO. The above, of course, is an uneducated view on the matter. Just been watching a couple of discussions on it lately elsewhere. If you have money, you're sorted. If you don't, you'd want a hell of a fool proof plan, and not some optimistic gubbins that will flop at the smell of a bad year either weather or price wise, never mind a few in a row.

My neighbour was selling his place and I was interested - precisely as it's next door. It's real poor land, but could be made into good grazing with time. I thought 40k tops. Think he was looking for a half million or million... Site (four stone wall ruins) included but absolutely no access :pac:

irishh_bob

ihatetractors wrote: »

5k in the next ten years,
few dairy men will be purchasing as they're mostly carrying debts from increasing in herd sizes, sheds etc... and they'll only purchase neighbouring land imo.
1st generation to ever leave the land, sad to think this way, but how many 30/40/ even 70 acre farms are there with the old father of 60 or maybe more farming alone, some will go farming, some will be sold as this tie to the land has been broken.
SFP, how many inefficient farms are being kept afloat by it?? how many farms is it 50% or more of income, and it's only going down in value.
Economies of scale, there'll be less income per acre due to higher costs over next number of years, higher prices doesn't mean higher incomes......
Land will be sold for what can be made off it, not just for what the bank will give, age of cheap credit, little or no security is LONG gone.

fully agree , a booming agri sector is not enough to maintain what still are high land prices , the broader economy was in much better shape in the year 2001 yet land prices were lower than they are today , i think land will not drop this year though , thier is a remarkable confidence out there right now plus thier is the phenomenon of those with cash being unsure of how safe thier money is in the bank , they want to bury it in land and who could blame them , their is no way beef or dairy prices will continue at present prices , this combined with the continued banking and economic crisis , will ensure that land prices continue downwards , im 33 and i say in all sincerity that i dont think i will ever see land prices of 20 k per acre again in this country

bbam

ihatetractors wrote: »

not just for what the bank will give, age of cheap credit, little or no security is LONG gone.

Was talking to the sister last week, she works in a bank in a reasonable size town in Co Meath. They are lending lots of money to farmers, specifically to farmers getting into milk from beef or sucklers.. Loans in the region of €150K to €250K no problem... she was talking about dairy being the only future in farming and the banks want to be in on it....
Interestingly she was talking about one transaction (no personal details), guy was getting €190K to build parlour and yard, machine, tank and 90 young cows...
I enquired what milk price the business plan was based on in five years time... the answer?? "that didn't come into it"

I couldn't help thinking that if milk prices post end of quotas doesn't hold up there might be lots land for firesale by the banks in a few years.. I'd fear a bust bit like the end of the building boom where money was thrown out based on ropey business plans..

ihatetractors

bbam wrote: »

Was talking to the sister last week, she works in a bank in a reasonable size town in Co Meath. They are lending lots of money to farmers, specifically to farmers getting into milk from beef or sucklers.. Loans in the region of €150K to €250K no problem... she was talking about dairy being the only future in farming and the banks want to be in on it....
Interestingly she was talking about one transaction (no personal details), guy was getting €190K to build parlour and yard, machine, tank and 90 young cows...
I enquired what milk price the business plan was based on in five years time... the answer?? "that didn't come into it"

I couldn't help thinking that if milk prices post end of quotas doesn't hold up there might be lots land for firesale by the banks in a few years.. I'd fear a bust bit like the end of the building boom where money was thrown out based on ropey business plans..

Beef is in a boom bust cycle atm... , if a Mercursor deal of any sort goes through we'll hav a few beef barrons of thousands of cattle, nothing else.
Grain is been dragged by beef atm, lads buying 200/300k worth of kit on one good year, seriously like!!, only reason grain was good was weather conditions favored use, not the russians tbh.
Dairy, lol, lads think we can be lik NZ... 65% of all NZ's output goes direct to china, we don't have that market. Russia?, they expanding their dairy herds now aswel, Arabs are aswel and Eu/ American consumtion is stagnant realy... SA/ africa, can they afford us?... 10/15 years ago we needed quotas to go, before this great demand took off worldwide like NZ, they're 10 years ahead of us and have the markets tied up. We have what, some butter, some babyfood formula?, for all we know in 30 yrs china will be exporting milk to us!!
Christ, NZ's are getting out of sheep, maybe we can have the world monopoly on them.
So tell me where the monies coming to pay for this great investment, please? Between rising cost of fert, fuel, labour? sher haven't the EU drafted up removing green diesel to make us more efficient? talk about shooting yourself in the foot, we're in a worldmarket now lads..

irishh_bob

ihatetractors wrote: »

Beef is in a boom bust cycle atm... , if a Mercursor deal of any sort goes through we'll hav a few beef barrons of thousands of cattle, nothing else.
Grain is been dragged by beef atm, lads buying 200/300k worth of kit on one good year, seriously like!!, only reason grain was good was weather conditions favored use, not the russians tbh.
Dairy, lol, lads think we can be lik NZ... 65% of all NZ's output goes direct to china, we don't have that market. Russia?, they expanding their dairy herds now aswel, Arabs are aswel and Eu/ American consumtion is stagnant realy... SA/ africa, can they afford us?... 10/15 years ago we needed quotas to go, before this great demand took off worldwide like NZ, they're 10 years ahead of us and have the markets tied up. We have what, some butter, some babyfood formula?, for all we know in 30 yrs china will be exporting milk to us!!
Christ, NZ's are getting out of sheep, maybe we can have the world monopoly on them.
So tell me where the monies coming to pay for this great investment, please? Between rising cost of fert, fuel, labour? sher haven't the EU drafted up removing green diesel to make us more efficient? talk about shooting yourself in the foot, we're in a worldmarket now lads..

ive seen more possitivity in a george lee report

ihatetractors

irishh_bob wrote: »

ive seen more possitivity in a george lee report

Sorry, not generaly so bleek this study craic is getting to me!! :rolleyes:
I know i've very ambitious plans at home more than most!!, but still, there's some, inconvenient questions no one wants to answer that need to answered imo/
Mini rant over!

Min

Dairy products will be in demand, China imports a lot of dairy products now, the Chinese lack trust in their own dairy industry after the melanine scandal that killed 6 children and made hundreds of thousands sick. It was in the farmers journal today that 3 people in China died from milk contaminated with nitrates plus the government shut down 45% of all dairies.

China does not consume the same level as dairy products as the rich western countries, as China and India continue to grow in wealth it has been shown that dairy consumption is increasing.

The demand for dairy products is only going to increase for a number of reasons and for all food products.

World population is growing, the sad thing is 1 billion people do not have enough food and even in the EU the amount of food is low, there are no food mountains, about 26 days of food.

The food and energy sectors is where the demand is.


Food is at the centre of the unrest in the middle east and north Africa.

Cheap food is going to be like cheap oil...you will be waiting a long time.

keep going

big prob i see with buying land(aside frombanks and future prices) is tax. land is purchased out of after tax income so if you pay 10k for land you have to make 25k to pay for it allowing for interest and tax