The Rural Update: Climate resilience is key for farming
Your weekly dose of news, views and insight from Knight Frank on the world of farming, food and landownership
7 minutes to read
Viewpoint
A look behind the headlines of the government’s latest Total Income from Farming (TIFF) figures discussed below makes for interesting reading. The first conclusion, given the sharp drop in the value of cereal sales last year, is that the weather remains the biggest threat to the UK’s self-sufficiency and food security. The second is that government support payments still account for a significant chunk of farm income. Given that the UK’s weather patterns are becoming increasingly volatile – new geospatial data from the Food and Agriculture Organisation of the UN predicts half of the world’s best wheat land could be lost by 2100 - and future support payments are likely to be cut in Chancellor Rachel Reeves’ spending review later this week, farmers will need to focus even harder on ways to make their businesses more resilient. Crop diversification, enhanced soil management and new income streams will all play a part, with the improved use of data playing a key role in the decision-making process. To find out how technology and data are being used by some of the country’s leading estates to boost their resilience, take a look at the latest edition of The Rural Report, which was published last week. Maintaining the status quo is no longer an option.
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Commodity markets
Think about fertiliser
Commodities trader Frontier is urging farm businesses to start planning their fertiliser strategies for next season now. The EU’s move to impose tariffs from 1 July on fertiliser imports from Russia and Belarus, which previously supplied 30% of the bloc’s requirements, will add pressure to an already difficult market that has seen some factories shut down due to high gas prices. The EU tariffs for ammonium nitrate will kick off at €40/tonne, rising to €315/tonne by 2028. Frontier warns that EU manufacturers could prioritise their domestic customers, making things even trickier for UK farmers.
The headlines
Farm incomes rise, but….
New figures from Defra estimating the UK’s Total Income from Farming (TIFF) in 2024 contain some nasty numbers lurking behind the positive headline.
Overall, TIFF rose by £1.6 billion to hit £7.7 billion, a 26% increase on 2023. This was driven by a drop of £1.2 billion in the costs of inputs and a £400 million increase in the value of crops and livestock sales.
Livestock producers had a good year with the total value of sales rising almost 6% to £1.1 billion to just over £20 billion, with eggs (+35%), beef (+9%) and milk (+6%) all performing strongly.
It was, however, a different picture for arable businesses. Poor yields due to the wet weather saw significant losses for oilseed rape (-31%), wheat (-27%) and barley (-14%). The total value of arable outputs fell by £0.6 billion to £11.7 billion.
Income from farm subsidies, including environmental payments, increased marginally to just under £3 billion, accounting for almost 39% of TIFF.
Agriculture’s contribution to the UK’s economy rose 13% to £14.5 billion, although this still accounted for only 0.6% of GDP.
News in brief
Spending review concern
The big event of the week will be the government’s multi-year Spending Review that Chancellor Rachel Reeves will deliver to Parliament on Wednesday (11 June). The review will set planned day-to-day spending totals – about 40% of total expenditure – for all government departments for the years from 2026/27 to 2028/29, and investment spending plans until 2030. It is anticipated that Defra’s budget will be cut considerably, with future environmental support payments targeted at smaller farms.
Fair deal for farmers
Combinable crop producers are set to join the dairy and pig sectors, with Defra Minister Steve Reed announcing a review to tackle unfair practices in the supply chain, which he claims will protect their businesses and income. The Fair Dealing (Milk) Regulations came into effect on 9 July 2024, and the Fair Dealing (Pigs) Regulations have recently received parliamentary approval.
Flooding fix
The government has also just announced plans to streamline the current complex approach to securing funding for flood and coastal erosion prevention projects. It will automatically cover the first £3 million of any costs and 90% of the balance above that. A consultation on the flood defence and funding proposals, which also asks for suggestions on alternative sources of funding for flood and coastal erosion projects, closes on 29 July.
Scottish crofting review
The Crofting and Scottish Land Court Bill has just been introduced to the Scottish Parliament. The bill, which has been welcomed by NFU Scotland, Scottish Land & Estates and the Law Society of Scotland, seeks to simplify and improve some important areas of crofting law, including the duties of crofters, the work of the Crofting Commission and the operation of common grazings. It also proposes the merger of the Scottish Land Court and the Lands Tribunal for Scotland.
Mad cow label lifted
Around four decades after Bovine Spongiform Encephalopathy (BSE), popularly known as Mad Cow Disease, was first detected in the UK, the World Organisation for Animal Health has finally declared our risk status for the disease to be “negligible”. This should open up new export opportunities for British meat.
Cattle tag tech
Meanwhile, Defra has just announced ear tags that can be scanned electronically will be compulsory for all newborn calves from 2027. Changes to cattle identification, registration and reporting will also start to kick in from next summer. The government says the changes will make it easier to track cattle movements, improve its ability to respond effectively to disease outbreaks, and simplify regulations, while boosting productivity, food security and international trade.
Non-stun debate
Following a public petition calling for the banning of non-stun livestock slaughter that attracted 109,000 signatures, Parliament debated the issue earlier this week. Non-stun slaughter is still used in the processing of some Kosher and Halal meat, although most Hala slaughter already involves pre-stunning. You can read a transcript of the debate here.
Fruit & veg checks checked
The government has also just announced it will scrap border checks on fruit and vegetables imported from the EU in an early move to ease trade ahead of its new SPS (sanitary and phytosanitary) deal with the EU, which was announced recently. Biosecurity Minister Baroness Hayman said: “This government’s EU deal will make food cheaper, slash bureaucracy and remove cumbersome border controls for businesses.” Some, however, worry that the SPS deal will make the UK more vulnerable to animal and crop diseases.
The Rural Report SS 25 – Out now
The Spring Summer 2025 edition of The Rural Report, Knight Frank’s flagship publication for rural businesses, which looks in more detail at many of the issues discussed in The Rural Update, is out now. The new report includes the latest news, research and insights from Knight Frank’s rural property experts, as well as thought-provoking contributions from some of Britain’s most iconic estates.
Available online and in print, you can click here to access the full report.
Property of the week
Suffolk sea view
A 127-acre block of land on the north bank of the River Orwell at Levington, near Ipswich, offers a rare opportunity to acquire a large parcel of nature-rich Grade II listed parkland. Steeped in history and located close to Suffolk’s Heritage Coast, the land at Broke Hall includes a mix of rolling parkland, traditional woodland and marshland. The guide price is £1.5 million. Please get in touch with Georgie Veale for more information.
Discover more of the farms and estates on the market with Knight Frank
Property markets
Development land Q1 2025 – Market falls
The value of greenfield development land fell by 2% in the first quarter of the year. Urban brownfield sites, however, lost 5% of their value over the same period, according to the Knight Frank Residential Development Index.
Farmland Q1 2025 – Values resilient
The Knight Frank Farmland Index, which tracks the average price of bare agricultural land across England and Wales, showed a marginal drop of 1% in the first quarter of 2025 to £9,072/acre. This follows a similar small decline in the final three months of 2024, bringing the annual fall to just 1.9%.
Country houses Q1 2025 – Mixed picture
The average price of desirable homes in the countryside slipped by just 0.3% in the first quarter of the year, according to the Knight Frank Prime Country House Index. Over the past 12 months, values have fallen by 1.6%.