The Knight Frank Rural Property and Business Update – 12 April
Our weekly dose of news, views and insight from the world of farming, food and landownership
5 minutes to read
I try to be upbeat, but this week I have to report dissent among the food-and-farming ranks regarding the consequences of Brexit on trade with the EU and the attitudes of Westminster and Holyrood towards agriculture. Change always brings challenges and disruption that lead to inevitable grumbles, but it does seem clear that the process of leaving the EU has been made more difficult than it should have been for many food sectors. As governments pursue their laudable sustainability agendas they also need to remember that producing food is a vital service. Producers, meanwhile, need to create long-term consumer and market-based business strategies that reduce their reliance on government support.
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 – Easter sees markets lose ground
• Shooting – Knight Frank 2021 Shooting Sentiment Survey published
• Farmland values – join our latest rural webinar to discover what the future holds
• Organic farming – EU plan could leave UK producers behind
• Brexit – Meat sector to be hit by extra costs
• Overseas news – How to invest in African agriculture
Commodity markets – Easter sees markets lose ground
I take one week off and what happens? Most of the commodity markets we report on take a step backwards. Feed wheat, for example, is down over £15/t from its pre-Easter highs, while lambs are back 12p/kg. Beef prices, however, have remained on an upwards trajectory, breaking the 400p/kg barrier. Despite the slide, values are still comfortably higher than year-ago levels. The latest USDA world-supply and demand estimates, due to be published last Friday evening, could give clues to where grain markets will head next.
Shooting – Knight Frank 2021 Shooting Sentiment Survey published
In the second instalment of our survey, over 60% of the shoots questioned said they plan to put down the same number of birds and hold the same number of days as usual for the forthcoming season, according to the results of our survey. However, there seems to be a steady move towards smaller, less commercial shoots.
“Many of our clients remain concerned about the impact of Covid-19 on their shoots. The results of this survey show the extent of the disruption it caused last year and help identify the potential shape of the forthcoming season,” says my rural land management colleague Alastair Paul.
Download the full survey results
Farmland values – join our latest rural webinar to discover what the future holds
If you’d like to see me and three of my colleagues talking about farmland markets while buffeted by wind, snow and hail, with the occasional ray of sunshine bursting through, sign up for our latest rural webinar on 20 April.
In a change from the usual webinar Zoom format it’s filmed on location in rural Wales and lasts just 30 minutes. Well worth a watch if you’re interested in our views on where farmland values might be heading.
Organic farming – EU plan could leave UK producers behind
A plan by the EU Commission to have a quarter of the bloc’s farmland under organic production within the next 10 years is worrying farmers here. The multi-billion-euro Action Plan for the Development of Organic production will also see backing for consumer campaigns and targeting of third-country markets.
Speaking to Farmers Weekly Roger Kerr, Chief Executive of Organic Farmers and Growers, said this was the kind of approach the UK government should be adopting. “We need a national action plan. Sadly, there is no indication of a coherent interlinking strategy that matches what the government’s own advisers have been recommending.”
Meanwhile, across the Channel French farmers have jumped in their tractors and hitched up their muck spreaders again to protest at Brussels’ plans to re-target CAP farm subsidies at rural development and environmental measures.
Brexit – Meat sector to be hit by extra costs
A new report from the British Meat Processors Association (BPMA) has warned that leaving the EU could hit its members with additional costs of up to £120 million a year due to extra certification and inspection charges, as well as inefficient hard-copy paperwork “reminiscent of the 1970s”.
“Dismissing trade disruption at the borders as simply short term ‘teething problems’ is no longer credible,” points out the BMPA Brexit Impact Report.
The seafood and wine sectors have also raised concerns about the difficulties involved with trading with the EU since Brexit.
Read the full report
Scotland – Government land-use plan neglects farmers
Farmers and landowners in Scotland have criticised the Scottish government’s Third Land Use Strategy for devoting only two of its 48 pages to lowland agriculture. Lobby groups NFU Scotland and Scottish Land & Estates said the report failed to strike the right balance between sustainability schemes and agriculture.
Highlight the concerns of farmers, the latest annual Scottish Farm Business Survey reveals average farm incomes fell 36% over 2019/2020 to just under £26,000. Taking away farm support payments that figure dropped to a loss of £17,000.
Read Scotland’s Third Land Use Strategy
Overseas news – How to invest in African agriculture
I was delighted to contribute an article to the latest edition of our Africa Horizons magazine that looks at investment opportunities across the world’s most exciting continent. In it, I interview some of the team from SilverStreet Capital, which runs the biggest agricultural investment fund in Africa. Core to their investment strategy is creating benefits for local communities. As their results show, this doesn’t come at the detriment of performance, in fact it is key to the strong returns the fund has delivered.
Read the full article to find out more
Photo by Dana Luig on Unsplash