Farmland price increased by 3.5% during the first nine months of 2024, according to Sherry FitzGerald’s agricultural land price barometer.

Average price reached €12,342/ac in quarter three, it found, up from €11,929/ac at the end of 2023.

The biggest increase was in border counties where average price has risen by 6.4%. Prices in the west were stagnant. Prices rose for all land types.

The modest increase follows two years of higher growth, the study said.

The trend reflects cautiousness among farmers due to multiple challenges.

Higher interest rates were one factor. However, rates are now on a downward path and that is likely to have a positive effect on land prices from here on.

Squeezed farmer margins also impacted in 2024. Prices for fertiliser and animal feeds have now fallen by 24% and 13%, respectively, on last year but they remain higher than a few years ago.

It notes that milk, sheep and potato prices rose this year, although milk prices remain well under their peak at the end of 2022.

“The farming industry has had a tough year overall in 2024,” said Philip Guckian, associate director of Sherry Fitzgerald Country Farms, Homes and Estates. “Farmers have seen their incomes squeezed. There’s still a lot of uncertainty about the nitrates derogation. Despite this, competition for available land remains strong.”

He suggested that any ending of the nitrates derogation could see some farmers struggling to comply and deciding to sell their farms, leading to consolidation of the sector.