Land prices surge as investors seek ready-made facilities
The Northern Ireland agricultural land market is undergoing a significant shift, with investors now prepared to pay premium prices for land parcels that include buildings in good repair. Ulster Bank’s head of agriculture, Cormac McKervey, told BritFarmers that the traditional gap between bare land and property with farm buildings has virtually disappeared.
“Traditionally, there was very little difference in the overall price paid for bare land and acquisitions that also included farm buildings,” McKervey explained. “However, this scenario is fast changing. Investors are now prepared to pay premium prices for land parcels that also include buildings that are in a strong state of repair.”
The trend is particularly pronounced for poultry units, where demand is driving prices well above bare land values. McKervey attributes this to the difficulty of securing planning permission for new poultry enterprises in Northern Ireland, making existing facilities with housing a prized asset. “Acquiring a facility that has housing is one way of getting around this issue,” he noted.
Financial health of NI agriculture remains strong despite headwinds
Despite global uncertainty, Northern Ireland’s agricultural sector enters spring 2026 from a position of considerable financial strength. Official figures show total bank borrowings for agriculture in Northern Ireland stand at £947 million – the lowest this figure has been in the past decade.
Equally telling is that monies on deposit total £741 million, the highest level since 2016. McKervey described this as “a good news story for farming,” though he cautioned that external events continue to pose risks.
“The Middle East conflict has already impacted fuel and fertiliser prices,” he warned. “Feed prices are steady but could rise longer term. It seems finance costs are unlikely to fall given the Bank of England’s focus on base rate rather than risk adding to inflationary pressures.”
Specifically, milk prices appear to have bottomed out despite increased global supplies, arriving at a higher level than expected last autumn. While current prices remain below production costs, the market downturns predicted for the sector failed to materialise fully. Strong prices for calves, weanlings, and cull cows have helped compensate for the milk price dip.
The quality of milk produced on Northern Ireland dairy farms continues to improve, a trend McKervey said is worth “real money” across the sector. Securing an additional 2-3p per litre through improved butterfat and protein translates to £20,000-£30,000 of additional income per one million litres produced – a significant premium for efficient producers.
Farmers should weigh premium demands against long-term asset value
For working farmers considering their next move, the market signals are mixed but broadly favourable. If you’re sitting on land with buildings in good condition, particularly poultry facilities, the current appetite among investors means now could be an opportune moment to test the market. The premium for ready-made facilities shows no immediate sign of softening while planning constraints persist.
However, those looking to expand by acquiring such properties face a harder calculus. Premiums being paid by investors will compress returns, so careful arithmetic on achievable rental yields and long-term appreciation is important before entering negotiations.
The sector’s underlying financial strength – with borrowings at decade lows and deposits at eight-year highs – suggests most farm businesses can absorb short-term volatility in input costs. But the Bank of England’s apparent reluctance to cut base rates means finance costs will remain a burden for leveraged operations.
Specifically, dairy farmers who have invested in milk quality should continue that focus. The £20,000-£30,000 per million litres premium is real money that rewards consistent attention to solids content rather than simply chasing volume. With milk prices having found a floor, quality becomes the key differentiator for farm profitability through 2026.
Watch input costs carefully. While feed prices remain stable, the shadow of Middle East instability over fertiliser and fuel means scenario planning for cost spikes remains prudent.
Frequently Asked Questions
Why are investors paying premiums for NI farmland with buildings?
Planning permission for new agricultural developments, particularly poultry units, is difficult to secure in Northern Ireland. Investors therefore value existing facilities with housing already in place, leading them to pay premiums well above bare land prices.
What is the current financial state of NI agriculture?
Northern Ireland’s agricultural sector is financially strong. Total bank borrowings stand at £947 million – the lowest in ten years – while farm deposits of £741 million represent the highest figure since 2016.
How are milk prices performing in NI?
Milk prices have bottomed out and are performing better than autumn 2024 predictions, though they remain below production costs. Strong prices for calves, weanlings, and cull cows have offset some of the milk price weakness.
What premium can dairy farmers earn through milk quality improvements?
Each additional 2-3p per litre achieved through improved butterfat and protein content translates to £20,000-£30,000 of additional income per one million litres produced.
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