The average price per acre of agricultural land declined slightly last year, according to an analysis by the Irish Farmers Journal, bringing to an end a seven year period of uninterrupted price growth.
The latest annual Agricultural Land Price Report also pointed to a widening gap across the market, with average prices in Leinster and Munster continuing to grow, but prices fell in Connacht and Ulster.
The overall decline in prices was partly accounted for by a slightly higher availability of land on the market in 2023 but a slightly lower volume of land was sold in the year.
The Journal's report concluded that the average price for farmland declined by 3% per acre last year to €11,925 with the total volume of land sold down by 5% on 2022.
Average prices per county varied from €38,023 per acre in Dublin (based on a relatively small sample) to €6,284 per acre in Mayo.
The size of farm made little difference to selling prices with farms of under 40 acres averaging at €12,033 per acre while larger farms averaged at €12,101 per acre.
A total of 66,778 acres were placed on the market in the year with 28,260 acres sold.
The report noted that there was particularly strong demand for prime, large farms which, in turn, fetched high prices in both public auctions and private treaty sales.
Such farms were primarily bought by dairy farmers and business people.
Among other counties, Kildare, Kilkenny, Laois, Tipperary, Wexford, Waterford and Westmeath recorded notable prices increase while prices fell in Mayo, Monaghan, Offaly and Roscommon.
"Bad weather along with high costs and low prices for farmers saw a small drop in national average prices last year," Paul Mooney of the Irish Farmers Journal and report author noted.
"These challenges included lower milk prices, squeezed profits in tillage, weather difficulties, general high costs and - for some anyway - high tax bills on the better profits of 2022. Finance was more difficult to obtain for some of those looking to borrow for a land purchase."
Auctioneers reported some sluggishness in the second half of the year, but demand remained buoyant.
Less money and confidence led to softer prices, particularly in northern and western areas, the report noted.
Prices rose in most dairy-dominated counties, but countering this, last year saw a large number of 'plainer farms' and parcels of marginal land being brought to market which resulted in prices falling in some counties.
The report analyses the main factors which will impact agricultural land prices in the future, including what will happen if Ireland loses its Nitrates Derogation as well as how the new CAP direct payment schemes are impacting the market for land and entitlements.
"The tigher nitrates rules have been putting pressure on dairy farmers for the past number of years and will continue to do so," Paul Mooney explained.
"The effect of these tighter rules is encouraging or forcing dairy famers to try and acquire more land by purchase or leasing and it's one the main factors for higher demand in the southern counties in Munster, for instance," he added.
