The Rural Update: Encouraging climate resilience
Your weekly dose of news, views and insight from Knight Frank on the world of farming, food and landownership.
7 minutes to read
Viewpoint
Spend just a few minutes on social media, and you’ll notice that the argument over climate change is becoming ever more heated between those predicting an imminent catastrophe if we don’t keep a lid on global temperature rises and those claiming manmade climate change and the net-zero agenda are a huge hoax and a con. The danger is that such polarisation leads to climate fatigue and inertia. However, as some of our articles this week highlight, climate change, regardless of what’s causing it, is already having an impact on UK agriculture. Businesses need to look at ways to cope with the challenges and grab the opportunities. But, as we also reveal, the government’s own figures show farmer optimism about the future of their businesses is trending ever lower. Defra says the rush to apply for its latest round of Capital Grants funding (also discussed below) shows that farmers are committed to a sustainable future. Arguably, what it actually shows is that following previous sudden scheme closures, they have little confidence in future funding streams. If policymakers want an industry primed to tackle the threat climate change poses to the UK’s food security, they need to find a way to boost optimism. The speed with which the NFU and farmer activists latched on to Donald Trump’s recent comments about the impact of Inheritance Tax suggests an easy win if the government wants one.
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Commodity Markets
Hay prices up
Bad news for livestock producers and horse owners. The particularly dry conditions experienced this year have hit grass growth, sending big bale hay prices to a four-year high of £91/tonne. The last time prices were this high was during the Covid-19 pandemic, which distorted the market. According to research from Reading University, climate change has already seen hay yields in the south of England decline by around 35% over the past 100 years, with a further drop of up to 50% forecast by 2080.
The headline
Climate food-price hit
Shifting climatic conditions in the UK and overseas could add significant pressure to food price inflation, according to a new report from the Autonomy think tank.
On the Horizon – Climate-induced inflation and the price of food suggests that “climate-flation”, caused by an increasing number of extreme weather events, such as drought and heavy rainfall, could add an additional 30% to food prices over the next 25 years.
Some of the report’s thought-provoking recommendations include the introduction of buffer stocks and price controls on essential items to help stabilise food prices and ensure availability during supply-chain disruptions.
Long-term investment in regenerative and agroecological farming practices is also crucial to build resilience in the domestic food system and reduce reliance on imports, it says.
News in brief
Farmer optimism down
One of the government’s own surveys has further highlighted the growing sense of pessimism pervading the agricultural sector. According to the latest instalment of the Farm Opinion Tracker for England, released last week, only 4% of farmers feel very positive about their future, with just 29% somewhat positive. Although 84% of farmers said environmental payments will be important to their businesses, 72% are “not at all confident that changes to schemes and regulations will lead to a successful future”.
Capital grants depleted
As predicted in last week’s update, the latest £150-million round of Defra’s Capital Grants scheme has now been closed following a flood of applications from farmers keen not to miss out again following the unexpected closure of the Sustainable Farming Incentive earlier this year. Over 8,000 applied for funding in under five weeks. A Defra statement said: “The high level of interest has been encouraging and shows how committed farmers are to improving their land, protecting the environment, and investing in a more sustainable future for farming.”
Renewable power record
Energy from renewable sources generated over half of the UK’s electricity needs for the first time in 2024, newly released government figures have confirmed. Electricity generation from renewable technologies hit 50.4% in 2024, up from 46.5% the previous year. Generation from wind reached a record high, and bioenergy generation increased by 17%. Fossil fuels, meanwhile, contributed a record low of 31.8%. Gas, however, remained the principal form of UK generation at 30.4%, just outpacing wind’s 29.2% contribution.
Ribena breeding boost
Global beverage giant Suntory, the owner of the Ribena brand, has just announced it will be providing almost £1 million of extra funding to the James Hutton Institute over the next five years to help develop blackcurrant varieties that can better cope with changing climate conditions. A statement from the company said: “This investment will accelerate work to develop new varieties of berries that produce consistent yields in the face of climate challenges. They will be bred to withstand extreme weather, pests and diseases while preserving the signature Ribena taste.”
BNG better off-site
A new report co-authored by a number of consultants involved in the Biodiversity Net Gain (BNG) market has concluded that larger off-site mitigation schemes deliver far greater benefits for the environment than fragmented on-site measures by developers. The report, The comparative value of on-site vs off-site Biodiversity Net Gain for restoring nature, advises the government to ensure local planning authorities prioritise off-site measures during the development planning process.
Mexico pork win
Twelve pork processors in England and Northern Ireland have been granted access to the Mexican market following eight years of negotiations. As part of the trade deal, said to be worth £19 million over the next five years, the businesses will also be able to export offal and edible by-products that Mexican consumers enjoy as part of classical buche meat dishes. “Sustaining and growing the export market is essential for optimising the full value of British pig carcasses, which in turn helps strengthen prices for UK farmers at the farm gate, said Defra.
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.
Properties of the week
Views of the White Horse
Mount Farm is a 170-acre ringfenced Wiltshire farming estate with views of the Cherhill White Horse. Guided at £8.75 million, the farming estate at Bremhill, near Calne, includes a modern yet traditionally styled eight-bed country house, 95 acres of pasture, 34 acres of arable soil and 36 acres of woodland. Around 10,000 new trees were planted to celebrate the late queen’s Diamond Jubilee. There is a 10-day family shoot. For more information, please contact Will Oakes.
Historic Kent estate home to rent
For anybody looking to sample estate living without making a long-term commitment, Knight Frank’s Rural Consultancy team in Kent has an intriguing option on offer. Newhouse at Mersham, near Ashford, which was once home to The Countess Mountbatten of Burma and Lord Brabourne, is part of the idyllic 2,700-acre Hatch Park Estate. Now available to rent, the nine-bed period property costs £7,995 a month. For more information, please contact the team’s Katie Bundle.
Discover more of the farms and estates on the market with Knight Frank
Property markets Q2 2025
Farmland – Uncertainty dominates
Despite cuts to support payments and lacklustre grain prices, the average price of bare agricultural land fell just 2.3% in the second quarter of the year, according to the latest instalment of the Knight Frank Farmland Index. “It’s really difficult to discern any clear value trends at the moment because of reduced transaction levels,” says Will Matthews, Head of Farms & Estate Sales. Download the full report for more data and insight.
Country houses – buyers’ market
It’s a buyers’ market when it comes to rural homes, according to the latest research from Tom Bill, Knight Frank’s Head of UK Residential Research. The Knight Frank Prime Country House Index slipped by 2.5% in Q2, the second-largest quarterly decline since Q1 2009. At the same time, the number of properties for sale is up 9% compared with this time last year. On average, there are six prospective buyers for each new instruction, compared with 19 at the height of the Covid-19 pandemic, while sales are achieving 94% of the asking price. Read more of Tom’s numbers and insight.