The Rural Update: Full steam ahead
Your weekly dose of news, views and insight from Knight Frank on the world of farming, food and landownership.
7 minutes to read
Viewpoint
The collective eyes of the farming industry are naturally focused expectantly on Defra, but the big post-election announcements affecting the countryside have so far come from other government departments. Ed Miliband, the bête noir of net zero sceptics, has already made his intentions on renewable energy clear by giving the green light to three huge solar parks in East Anglia with more apparently to follow. Good news if you are trying to promote one on your farm or estate, less welcome for those who worry about their impact on the rural environment or food security. Chancellor Rachel Reeves wants a homebuilding blitz including a review of the greenbelt. Defra Minister Steve Reed meanwhile has avoided dropping any big bombshells, instead meeting farmers and creating the right mood music to show he is in listening mode. What is crucial though is that he lives by his mantra of working collectively and collaboratively (see below). This includes ensuring Defra and the countryside aren’t left in the wake of other headline-hungry departments whose decisions can have far-reaching consequences for rural communities. Ensuring the countryside delivers for everybody requires joined-up thinking and a coherent land-use strategy.
In this week's update:
- Grains/oilseeds dip again
- Government hits ground running
- Wider Defra team announced
- Blenheim vineyard opportunity
- Fairer milk contracts
- Farm assurance review
- Wilding – The movie!
- Farmland values hold firm
- Exmoor gold
Commodity markets
Grains/oilseeds dip again
The road remains rocky for arable farmers with grain and oilseed prices dipping again after a short-lived recovery. November feed-wheat futures prices for both 2024 and 2025 are back below £200/t. Latest estimates show the US could be set to harvest its biggest wheat crop in five years. After early disappointing results the UK’s oil seed rape crop is also delivering better yields than expected. Lamb prices, meanwhile, saw their biggest weekly fall of the year, but are still at historically high levels for this time of year.
Headlines
Government hits the ground running
The new Labour administration has shown it means business with a slew of controversial announcements in its first few weeks. Within days of the election Shadow Chancellor Rachel Reeves had already called for a review of the green belt as part of the government’s pledge to deliver 1.5 million new homes over the next five years. On Monday (July 15th) it was announced that Ed Miliband, head of the Department for Energy Security and Net Zero, had approved three large solar parks in East Anglia with a combined capacity of 1.35 gigawatts. This is around two thirds of the total solar capacity installed in the UK in 2023. The UK, however, is still lagging behind other European countries. Germany, for example, installed 14 gigawatts of solar capacity last year, pretty much on par with the total capacity of the UK. Miliband also announced a ban on new licences for North Sea oil exploration, a move that some have pointed out seems to conflict with the energy security part of his brief.
Our wish list for Kier Starmer last week mistakenly excluded the urging of Andrew Martin from our Agri-consultancy team for trade deals that don’t hurt UK agriculture. But word obviously gets around as Defra Minister Steve Reed, making his first public speech at the Great Yorkshire Show, hinted that the government could relook at the post-Brexit free-trade agreements struck with Australia and New Zealand. UK farmers fear they could allow imports of beef and lamb produced to lower welfare standards than required here. Iminent action on food chain fairness and biosecurity was also promised.
I saw Mr Reed speak at the Great Yorkshire show, said first impressions were positive: “It was encouraging to hear him explain that his success in turning around Lambeth Council was achieved by working collaboratively and collectively to solve the problems he faced, an approach he is keen to replicate as he tackles his five priorities at Defra.”
Elsewhere, Mr Reed has also announced sweeping reforms of the water industry, including the power for consumers to hold company bosses to account through “powerful” customer panels
If you need advice on potential solar schemes please contact Chris Monkhouse in our Renewables & Energy team.
In brief
Wider Defra team announced
The following MPs will be joining Secretary of State Steve Reed at Defra:
Daniel Zeichner - Minister of State
Emma Hardy - Parliamentary Under Secretary of State
Baroness Hayman of Ullock - Parliamentary Under Secretary of State
Zeichner, previously shadow farming minister, is a passionate European and even defied his party whip, losing a ministerial role in the process, to vote for a Tory amendment to the 2017 Queen’s Speech supporting membership of the single market. Hardy, a former teacher and education and women’s health advocate, was shadow minister for Environmental Quality and Resilience prior to the general election. Baroness Hayman served as a shadow minister for flooding and shadow Defra Secretary of State before losing her seat in in the 2019 general election. She was given a peerage in 2020 and due to her views on animal welfare wore fake fur when taking the oath of allegiance. Her family runs a smallholding in West Cumbria and she was appointed president of the Rare Breeds Survival Trust in 2021.
Blenheim vineyard opportunity
Ed Mansel Lewis, our Head of Viticulture, is looking for an established winemaker to help create a new vineyard and co-branded sparkling wine brand in conjunction with the Blenheim Palace estate. The successful applicant will have access to a carefully selected 150-acre site on which to create a commercial vineyard and also the opportunity to plant a “showcase” vineyard within the palace’s gardens. “Blenheim Palace is one of the most famous and recognisable historic landmarks in Britain,” says Ed. “This opportunity represents an aspirational brand association that few wine producers could ever attain.” Find out more.
Fairer milk contracts
All new milk contracts between farmers and buyers will now have to conform to a new set of regulations that came into force last week. The Fair Dealings Obligations (Milk) Regulations includes measures to make pricing more transparent and include a 21-day no-penalty cooling off period for producers after signing a contract. Milk processors will have to give 12-months’ notice to terminate contracts. The rules will apply to existing contracts from next year.
Farm assurance review
Assurance schemes such as Red Tractor have always received mixed reviews from farmers, some of whom feel the value they offer doesn’t make up for the associated costs and admin time required. Now, however, they have the chance to make their views count as part of a new independent review commissioned by AHDB and farming unions. Take part in the survey.
Knowledge exchange
Wilding – The movie!
Isabella Tree’s beautifully written and compelling account of how she and husband Charlie Burrell created the iconic Knepp Castle rewilding project, one of Europe’s most significant, is a must-read for any estate owner thinking of restoring nature on their property. Now her book Wilding has been made into a film that Katharine Beswick of our South East team says, after a recent screening, is equally thought provoking. “While it may be a step too far for some it shows that rewilding can be achieved at scale and has the ability to turn an unprofitable farm into something unique.”
The latest research
Farmland - Values hold firm in Q2
The farmland market in England and Wales shrugged off the potential impact of the recent general election to register another quarterly price increase, according to the latest results from the Knight Frank Farmland Index. Average values nudged up by almost 1% in the second quarter of the year to hit £9,335/acre. For more insight and data please download the full report.
Property of the week
Exmoor gold
This week we’re off to Exmoor where Alice Keith of our Farms & Estates team is selling Halsgrove Farm. The secluded property near Withypool includes a five-bed house, modern farm buildings and 162 acres of pasture and woodland. There are also grazing rights on Withypool Common. The guide price is £3 million.