Kiwi concerns, Food price revolution, Wealth Report insight
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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It is tempting to say that tracking the price farmers in the UK are receiving for their wheat and oilseed rape is of limited importance when a vicious war is raging. That view, however, overlooks the wide-ranging impact of food price inflation on global geo-politics. Spiralling food prices were a factor in the Arab Spring uprisings of 2011, so while increased supermarket bills will prove uncomfortable for Western governments, those in power in some more politically volatile countries could potentially be extremely nervous right now.
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Andrew Shirley, Head of Rural Research
In this week’s update:
• Commodity markets – Ukraine crisis sparks commodity climbs
• Global trade – NZ deal worries farmers
• Tree planting – New scheme opens
• The Rural Report – Sign up to watch our ground-breaking video
• Overseas news – Read The Wealth Report
Commodity markets – Ukraine crisis pushes commodities higher
Last week I suggested that the impact of Russia’s invasion of Ukraine on commodity prices was only just beginning. Since then we have seen input, output and energy prices rocket. May wheat futures were heading towards £300/t as the conflict hits supply chains for Russian and Ukrainian grain exports. This could have serious geo-political as well as economic ramifications. Egypt, for example, is a big buyer of wheat from the region and higher food-price inflation could prompt civil unrest. The big unknown for markets is what effect the war will have on spring planting and fertilising and harvesting of winter-sown crops. As one of the world’s biggest wheat and oilseed exporters, any serious agronomic disruption in the Ukraine could have incredibly serious implications as world wheat stocks are already extremely tight.
Global trade – NZ deal worries farmers
A free-trade deal that, once ratified, will immediately eliminate around 97% of tariffs on imports from New Zealand and 100% of UK exports heading in the other direction was signed last week.
Although tariffs on Kiwi dairy, beef and lamp exports to the UK will not be removed immediately and will be phased out gradually over a number of years, livestock farmers, particularly upland lamb units, are still concerned that they will not be competing on a level playing field, given New Zealand’s lower costs of production.
The deal will now be scrutinised by the Trade and Agriculture Commission. If approved, ratification is expected next summer.
Tree planting – New scheme opens
Those wishing to take advantage of the second round of the government’s Local Authority Treescapes Fund and the Urban Tree Challenge Fund, which opened last week, have until the end of May to apply.
Now in its second round, successful applicants to the Local Authority Treescapes Fund will be allocated a share of £5.4 million for the planting of up to 650,000 trees in 2022/23. Projects will support local authorities to establish trees in different ways, from natural regeneration to traditional planting.
Community engagement is encouraged, and local authorities can bring together local residents, schools and environmental groups to restore trees in areas outside woodlands. These include riverbanks, parks, beside roads and footpaths, and within vacant community spaces.
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 – Read The Wealth Report
The Wealth Report, edited by yours truly, is Knight Frank’s market-leading annual snapshot of the big issues facing global UHNWIs and their advisors. This year’s edition, which includes a feature on indoor farming in Singapore, was launched last week. Head to its dedicated website to read all the articles or download a copy.
Photo by Jeb Buchman on Unsplash