Happy New Year, Landscape recovery, Latin American bees
The Knight Frank Rural Property and Business Update – Our weekly dose of news, views and insight from the world of farming, food and landownership
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Happy New Year. There’s a lot to ponder in my first Rural Update of the year. First off, there’s some good news for rural property owners - the value of farmland and country houses recovered strongly last year. In the case of farmland, the rise in prices was driven partly by growing demand from potential rewilders, although it should be noted that this was against a backdrop of historically low availability. There is a lot being written about rewilding at the minute, so it was unsurprising that the government’s launch of its new Landscape Recovery scheme was immediately assumed by some to be all about rewilding. But, as my colleague Tom Heathcote sagely points out, landscape recovery is about far more. On that note, I wish everybody a prosperous 2022 - it’s going to be an interesting year for sure.
Do get in touch if we can help in any way
Andrew Shirley, Head of Rural Research
In this week’s update:
• Commodity markets – OSR enjoys New Year climb
• Land prices – Eco-buyers drive farmland market
• The environment – New nature recovery schemes launched
• Country houses – Prices bounce back in 2021
• The Rural Report – Sign up to watch our ground-breaking video
• Overseas news – Chilean beekeeper protest
Commodity markets – OSR enjoys New Year climb
Oilseed rape prices have continued to climb sharply since the last edition of the Rural Update when they were sitting at under £590/t pre-Christmas. A combination of too much rain in parts of South America’s key arable areas, and drought in others could potentially hit the region’s soybean harvest, which will have a knock-on effect on other oil crop markets. Market sentiment for the year will be further shaped by the next instalment of the USDA’s World Agricultural Supply and Demand Estimates (WASDE) due out shortly.
Land prices – Eco-buyers drive farmland market
The full-year figures for the Knight Frank Farmland Index have just been released. They reveal that the average price of bare agricultural land in England rose by 10% to £7,580/acre in 2021 – the first annual rise since 2015. A lack of supply and strong demand from buyers looking to rewild, practice other sustainable farming initiatives or take advantage of potential carbon markets helped push up prices.
Download the full report for more insight and data
The environment – New nature recovery schemes launched
Speaking at this year’s virtual Oxford Farming Conference Defra Minister George Eustice provided further details of the Local Nature Recovery scheme and the Landscape Recovery scheme. The two initiatives complete the trio of Defra’s environmental support schemes, which form the core of the government’s post-Brexit support for agriculture, following the launch of the Sustainable Farming Initiative last year.
Landscape Recovery will support individuals or groups who want to take a more radical, large-scale, and long-term approach to producing environmental and climate outcomes through land-use change and habitat and ecosystem restoration. Schemes will range from 500 to 5,000 hectares and the government is inviting applications for 15 pilots, which it hopes will deliver at least 10,000 hectares of restored habitat.
Local Nature Recovery will replace the existing Countryside Stewardship Scheme by paying farmers for locally targeted actions that make space for nature in the farmed landscape and countryside. Defra says it will work with farmers on the details this year before rolling out the scheme in 2023.
Despite the lack of detail, Tom Heathcote, the Head of our Agri-consultancy team, says both schemes look interesting. “I am particularly excited by Landscape Recovery, because that will offer our clients the chance to deliver large-scale meaningful change. Some people are branding it as a rewilding scheme but to me that is a red herring, there are many other ways to implement change.”
Country houses – prices bounce back in 2021
The average value of prime country houses increased by almost 11% last year, according to newly released figures from the Knight Frank Prime Country House Index, compiled by my colleague Chris Druce. However, houses in the £5m+ bracket performed even more strongly, rising by 20%.
This growth marks a change of fortune for the prime rural housing market which, prior to the Covid-19 pandemic and the subsequent “race for space”, had been underperforming the wider market. While the average property price in England and Wales grew 23% in the five years to March 2020, the average price of £5m+ property fell 8%.
The latest edition of The Rural Report, our unique publication for rural landowners and their advisors, was launched 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 – Chilean beekeeper protest
We’ve all heard of French farmers paving the streets of Paris with muck, but now it’s the turn of Chile’s disgruntled beekeepers to hit their capital. The apiarists demonstrated outside the presidential palace in Santiago, calling for the government to provide more support for their ailing industry. The protesters set up dozens of hives containing 10,000 bees to draw attention to their plight, and stop police from shutting down the rally - at least seven police officers were stung.
Beekeepers say that a decade-long “megadrought” has ruined the crops and flowers needed to sustain bees — and they want the government to guarantee honey prices or provide subsidies for producers. Bees pollinate some of Chile’s major food exports like avocados, apples and almonds, and help sustain an export industry worth almost US$6.5 billion.
Photo by Dustin Humes on Unsplash