The Knight Frank Rural Property and Business Update – 12 July
Our weekly dose of news, views and insight from the world of farming, food and landownership
5 minutes to read
Rewilding is a hot topic at the moment. Many of the enquiries fielded by our Farms & Estates team are from wealthy individuals – and even film stars – who fancy some land of their own to “Neppify”. But the missing ingredient from such projects in the UK is the lack of an apex predator to complete the food chain. While there seems little serious intent to let wolves and bears roam wild again, the reintroduction of the lynx seems more realistic. But many don’t agree. It’s an issue that conservationists and farmers need to have a constructive debate around. We discuss some of the arguments in the latest edition of The Rural Report.
Please do get in touch with me or my colleagues mentioned below if you’d like to discuss any of the issues covered. We’d love to hear from you
Andrew Shirley, Head of Rural Research
In this week’s update:
• Commodity markets – Milk markets under pressure?
• Brexit and trade 1 – EU seed potato import ban
• Brexit and trade 2 – British Sugar challenges cane imports
• Brexit and trade 3 – EU imports lag rest of world
• Species reintroduction – Lynx article inspires heated debate
• Farmland values – New farmland index figures confirm market resilience
• The Rural Report – Sign up to watch our ground-breaking video
• Overseas news – US farmer confidence declines
Commodity markets – Milk markets under pressure?
Although the average farm-gate price of milk in the UK nudged over 30p/litre in May, an index that tracks global dairy commodity markets suggests there could be some pressure on prices later this year. The bi-weekly Global Dairy Trade price index slipped for the sixth consecutive time last week off the back of strong deliveries in the US and New Zealand. UK deliveries, however, are slightly down on the year.
Brexit and trade 1 – EU seed potato import ban
Defra has restricted the import of seed potatoes from the EU after the bloc refused to back down on its own ban, in place since the beginning of the year. Seed potatoes, which have to pass stringent phyto-sanitary requirements to prevent the spread of diseases, were not included in the Brexit trade agreement. The UK exports around 30,000 tonnes annually to the EU, with around 10,000 tonnes coming the other way.
Brexit and trade 2 – British Sugar challenges cane imports
Seed potato growers aren’t the only ones upset about the trade ramifications of Brexit. Sugar beet growers are miffed that the government has used the opportunity of leaving the EU to allow over a quarter of a million tonnes of raw cane sugar into the UK tariff free. They feel they will be disadvantaged and as a result British Sugar, which buys their beet, has decided to take the government to court in a bid to get the decision quashed.
Brexit and trade 3 – EU imports lag rest of world
Figures from the Office for National Statistics show that that imports of goods from non-EU countries totalled £19.4 billion in May, while imports from the EU, many of which face new barriers to cross-border trade, totalled £18.5 billion. It was the fifth month running that EU imports lagged the rest of the world. In 2020 EU imports totalled £226bn against £194bn from elsewhere.
Species reintroduction – Lynx article inspires heated debate
In this year’s edition of The Rural Report we discussed the pros and cons of reintroducing species like beaver and lynx. To widen the debate I posted a poll on Linked In asking whether the lynx should be brought back to the UK.
Of the 522 votes cast 82% were in favour of reintroduction. However, the question led to a heated debate with a number of comments from readers questioning the potential impact on farm animals and whether the UK was too densely populated to cope with a large carnivore like the lynx.
The poll is now closed, but you can still join in the debate.
Farmland values – New farmland index figures confirm market resilience
As discussed in The Rural Report the farmland market has been buoyed by a surge in demand from environmentally focused buyers looking to farm in a more sustainable way or even to “rewild”. The Q2 figures from the Knight Frank Farmland Index, due to be released later this week, are set to reveal an increase in the average value of English farmland. Email me to request your copy of the index.
The Rural Report – Sign up to watch our ground-breaking video
This year’s edition of The Rural Report, our unique publication for rural landowners and their advisors, launched last month with a video highlighting some of its key content around the topic of ESG. If you missed it, you can sign up to watch on demand at your leisure. It was a lot of fun making it and includes a thought provoking interview on diversity, with Wilfred Emmanuel-Jones AKA The Black Farmer. I think you’ll find it both entertaining and informative.
Sign up to watch The Rural Report launch video
Overseas news – US farmer confidence declines
The Purdue University/CME Group Ag Economy Barometer has fallen for the second month running, dropping 21 points to a reading of 137 in June. US farmers are less optimistic about their businesses’ current and future financial outlook, with rising input costs and labour issues partly to blame. Despite the pessimism, producers are still largely bullish on farmland values.