The Knight Frank Rural Property and Business Update – 1st March
Our weekly dose of news, views and insight from the world of farming, food and landownership
Having seen the Conservatives seduce much of its northern heartland at the last election, the Labour party is extending an olive branch to agriculture. Quite how farmers and estate owners respond remains to be seen, but it’s certainly not healthy for one party to be able to claim hegemony over a particular part of the electorate. Anything that encourages the government to deliver on its rural promises has to be welcomed.
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
3 minutes to read
In this week’s update:
• Commodity markets – Prices climbing despite sterling gains
• Shooting – Take our new sentiment survey and win gin
• The Wealth Report – See the global picture
• Bioethanol - New petrol blend fuels UK wheat prices
• Politics – Labour bids to win rural votes
• Overseas news – Kazakhstan bans foreign farmland ownership
Commodity markets – Prices climbing despite sterling gains
Sterling’s continued rise – up almost 6% against the euro so far this year - hasn’t stopped the rise in lamb prices, which burst through the 600p/kg barrier this week. Values are now 160p above the five-year average, and 77p higher than the same week last year. Old crop wheat also nudged back over the £200/t mark again, with oilseed rape knocking on the door of £400/t. Pork remains the only commodity languishing below last year’s levels. In a bid to boost demand, supermarket Morrisons has taken radical action, dropping prices on some cuts by over 50%.
Shooting – Take our new sentiment survey and win gin
Covid-19 hit the shooting sector hard last year and, judging by the results of 2020 Shooting Sentiment Survey, it made many landowners rethink their approach to rearing pheasants and partridges. To find out whether attitudes have involved over the past 12 months we would be delighted if you could spend a few moments to complete our 2021 survey. All respondents will have the chance to win a Goliath (4.5 litres) of Foxdenton Gin.
Take our 2021 Shooting Sentiment Survey
The Wealth Report – See the global picture
As well as compiling this update and our other rural publications, I also edit The Wealth Report, Knight Frank’s flagship global research report that investigates the key wealth and real estate trends of interest to our clients.
The 2021 edition, out next week, includes some wise words from Tom Heathcote, our Head of Agri-Consultancy on how rural property could be one of the top sustainable investment choices of the next few years.
If you’d like to join our first virtual launch on 2 March and request a copy please sign up here.
Bioethanol - New petrol blend fuels UK wheat prices
As part of its bid to reduce CO2 emissions from road traffic, the government is set to increase renewable fuels in petrol blends from September 2021. Currently, petrol contains 5% bioethanol (E5) but this will increase to 10% (E10) in September.
This should help support wheat prices as UK ethanol production ramps up. With a bounce back likely for wheat use in the animal feed sector next season, the domestic supply and demand balance sheet could again be very tight.
Read the latest AHDB report for more insight
Politics – Labour bids to win rural votes, and pay you a visit
Many farmers and landowners have possibly not warmed to left-leaning politicians who in the past have seemed to have little positive to say about agriculture.
But the current Labour leader Keir Starmer is keen to change that with a conciliatory speech made last week at the NFU’s annual conference – the first by a Labour leader since 2008.
In it, Sir Keir announced a review of Labour’s rural policy and also hit out at the government’s handling of Brexit and the rollout of the new
Environmental Land Management scheme (Elms).
He said: “I can assure you this: from now on, British farming and the countryside will never be an afterthought for Labour again…… so if anyone wants to invite me to their farm, I’m ready!”
Read Sir Keir’s full speech
Overseas news – Kazakhstan bans foreign farmland ownership
The central-Asian country of Kazakhstan, a major agricultural producer sandwiched between Russia and China, will permanently ban foreigners from owning or renting farmland, its government has announced.
Five years ago its authorities decided to attract foreign investment into agriculture by opening up the farmland market. However, protests by the local population worried about China’s increasing influence on the nation forced a U turn.
The ban includes companies with foreign shareholders.