Covid 19 – Rural property and business update Tuesday 26 May

Commodity prices

Beef prices could hit 400p/kg by the end following a shift in consumer tastes and the reopening of McDonalds drive-through restaurants. At the beginning of the Covid crisis most demand was for cheaper cuts and mince, but shoppers are turning back to steaks helping to offset the closure of restaurants. Demand was up 20% year-on-year at the beginning of May, reports Farmers Weekly.

Eggs have also enjoyed a lockdown baking boost. Prices were up almost 10% in the first quarter of the year, with further gains expected as price data for April and May becomes available. They are certainly still a rare find in our local Co-op if you don’t get in early.

Less welcome, red diesel prices are also heading up. Apparently it is impractical to stock up too much when prices are low because the mandated addition of a certain proportion of bio-diesel to road fuels means they tend to “go off” more quickly.   

Scottish rural property market holds its breath

While our farms teams in England have been exceptionally busy since lockdown restrictions were relaxed, the Scottish market remains largely under lock and key. However, Nicola Sturgeon’s recent announcement suggests that activity may be allowed to resume from 18 June.

Tom Stuart-Moore, our Head of Farms & Estates in Scotland, says he has seven or eight properties waiting in the wings. A number of vendors are raring to launch publicly, while others plan to test the market privately. The Royal Highland Show held in June was always the date by which those selling their farms wanted to have them ready to view - the market will look very different this year.

Harsher penalties for harassing Scottish sheep

Cases of livestock worrying, however, have been on the rise during lockdown as more people walk their dogs along rural footpaths to comply with social distancing rules. A new bill brought forward by MSP Emma Harper will give the police greater powers to investigate and enforce offences and provide for tougher financial and custodial penalties.

International trade

Last week I mentioned the ire of farming groups after a proposed amendment to the Agriculture Bill that would ensure food imports met the same standards as UK-produced food was kicked out (Apparently Chancellor Rishi Sunak voted for the farmers, but only by mistake!).

Farmers have been slightly mollified by the release of a new schedule of agri-food tariffs (to replace those levied by the EU) that will be applied to imports coming into the UK. Some products such as eggs, cereals and some dairy products that were slated to have no protection under previous proposals now fall under the tariff scheme.

A few things to bear in mind, however. The schedule is based on the EU and the UK agreeing some kind of free trade agreement (FTA). The government has not committed to applying them to EU imports in the case of no deal being reached – as looks increasingly likely – by the end of the Brexit transition period (31 December).

And, of course, if we agree an FTA with the US, imports from there will also be tariff free. Although ministers have assured us that food standards will not be compromised as part of the deal, it is worth considering what food standards mean (with thanks to the NFU’s trade guru Nick von Westenholz). 

Under trade deals they generally refer to food safety, which the government is unlikely to compromise on. However, consumers and farmers also worry about animal welfare and environmental standards for ethical and competitive reasons (high welfare food is more expensive to produce), which are largely outside the scope of trade negotiations.

This is where the dreaded chlorinated chicken rears its ugly head. Difficult to ban because of animal welfare concerns (many US chucks are reportedly kept in conditions that would not be allowed this side of the pond), the EU blocks it import based on food safety concerns, concerns that studies show are largely unfounded.