Follow the science

Scientific research often polarises opinion in these depressingly social-media driven days. For some, evidence and data are vital before reaching a conclusion on a particular issue. Conspiracists, meanwhile, dismiss researchers as being in the pockets of big business and ignore their findings, however compelling. Two new bits of research that I stumbled across this week and discuss below may provoke a bit of controversy. One suggests it can be beneficial to burn heather on peat moorlands in certain circumstances; another questions whether soil carbon sequestration really has as much potential to combat climate change as people are hoping. Both matter. The former because it would be wrong to abandon certain management techniques just because particular groups don’t like them, the latter because billions of dollars are being pumped into carbon credit schemes, and many net zero targets rely on soil to do some of the heavy lifting. Have a read and make up your own mind.

Do get in touch if we can help you navigate through these interesting times. You can sign up to receive this weekly update direct to your email here

Andrew Shirley Head of Rural Research

In this week’s update:

• Commodity markets – Wheat dips, diesel doesn’t
• Environmental support – More Elms details released
• Avian flu – Game bird import restrictions eased
• Moorland management – Burning may not be bad
• Nature recovery – Government falling short
• International news – Dutch researchers question soil carbon gains
• Knight Frank Research – Farmland 2022’s top-performing asset
• Knight Frank Research – Benchmark staff salaries report
• On the market – Stunning Welsh farm

Commodity markets – Wheat dips, diesel doesn’t

I predicted that wheat would fall below 2022 levels before the New Year. That didn’t quite happen, but this week it has, with feed wheat prices slipping a further 2% to £213/t compared with £220/t this time last year. Looking forward, London May wheat futures are around £225/t, a whopping £130/t lower than the post-Ukraine invasion peak in May. Improving growing conditions worldwide and a record 2022 Russian wheat crop are putting pressure on prices. Diesel, however, remains stubbornly high. Unleaded prices, on average, are now just 5p/litre higher than they were in January 2022 – I filled up for just 139.9p/litre the other day, which was very exciting – but diesel is still almost 25p/litre up on the year.

Environmental support – More Elms details released

After much pressure, Defra has at last released further details about its Environmental Land Manage schemes (Elms) in a bid to help provide more clarity and certainty to land managers. An accelerated roll out of the Sustainable Farming Incentive will see six standards added in 2023. Options brought forward include hedgerows, integrated pest management, nutrient management, low input and improved grasslands, and arable and horticultural land.

Countryside stewardship will also evolve into the much touted ‘Plus’ scheme. It will offer farmers payments for tackling carbon and biodiversity with their neighbours. Scheme improvements include greater application and agreement flexibility, access for tenant farmers and increased access to the Higher Tier options. Applications for the Higher-Tier will open in February and Mid-Tier in March.

Defra has also confirmed that Landscape Recovery scheme applications will open in spring. This part of Elms focuses on net zero, protected sites and habitat creation – such as enhancing woodlands, peatlands and nature reserves.

For more information my Rural Research colleague Mark Topliff has written a more detailed Elms update.

Avian flu – Game bird import restrictions eased

Thanks to Katharine Beswick, of our Bristol Rural Consultancy team, for spotting this one. New trading regulations just agreed by the EU, and set to come into force on 6 February, will see the surveillance period and restrictions for exporting poultry out of the bloc to non-EU countries reduced from 90 days to a minimum of 30 days.

Katharine says: “The reduction in the surveillance period from 90 days to 30 days should hopefully help elevate some of the supply chain issues that were faced last summer. Although avian influenza still remains, this news hopefully should provide shoot owners and gamekeepers with an element of clarity and hope when sourcing poults for next season.”

Moorland management – Burning may not be bad

Heather burning on peat moors is a very controversial topic that polarises opinion, but now newly published findings from a long-term study led a Swedish academic at York University conclude that in certain circumstances it may actually be beneficial. “Both burning and mowing release considerable amounts of carbon during or in the first years after management, but this is counteracted by increased absorption later on. Short-term assessments are therefore misleading,” writes Andreas Heinemeyer in Protecting our peatlands. A summary of ten years studying moorland management: heather burning compared to mowing or uncut approaches. “Where a site is wet enough to use prescribed burning, this seems to be the most suitable option to allow carbon storage, peat growth, reduce heather dominance, increase biodiversity and keep the peatland wet,” he adds.

Nature recovery – Government falling short

The recently published Skidmore Mission Zero report gave the government a bit of a bashing for not doing enough to hit its net zero targets, now a report from the Office for Environmental Protection lambasts it for lagging behind on the commitments laid out in its 25-year Environmental Improvement Plan.

Of 32 trends assessed across the breadth of the natural environment; nine trends were improving, eleven were static, and eight were deteriorating. Of 23 environmental targets assessed, none were found where the government’s progress was demonstrably on track.

International news – Dutch researchers question soil carbon gains

Improving the carbon sequestration potential of agricultural soils is currently being touted as one of the main weapons in the battle against climate change. Indeed, billions of dollars are being funnelled into carbon credit schemes that reward landowners for improving their soils. These credits are then sold to businesses that need to offset their own carbon emissions. However, new research from Wageningen University in the Netherlands suggests hopes are being raised rather too high.

Using an extensive literature review and modelling, the researchers found little justification for the current global excitement around soil carbon sequestration. While estimated contributions of soil carbon sequestration to climate change vary, almost none take account of the fact that the increment in soil carbon always wears off over time to reach a maximum – the saturation level. If soil carbon saturation is included in calculations, the contribution of soil carbon sequestration to climate change mitigation is reduced by 53-81% compared to current estimates.

Knight Frank Research – Farmland 2022’s top-performing asset

As predicted, the latest results of the Knight Frank Farmland Index show that agricultural land as an investment beat inflation in 2022 and outperformed other asset classes, including mainstream house prices, luxury London house prices, the FTSE 100 share index and even gold. According to our index the average value of farmland rose by 13% over the year to hit over £21,000/ha, a record high. A shortage of supply and continued strong demand from a wide range of buyers underpinned the market. Download the full report for more facts and figures.

You can also hear some thoughts from my colleagues and me on the outlook for property markets in 2023 in the latest edition of Intelligence Talks, our research podcast.

Knight Frank Research - Benchmark staff salaries report

Just a reminder that the latest edition of the Knight Frank Estate Staff Salary Survey has recently been published. The report reveals the average salaries paid for a wide range of rural estate and farming roles and level of wage increases being offered by rural businesses. Also highlighted are the key employment issues facing the rural economy. Download your copy here or get in touch with Chris Terrett for more details.

On the Market – Stunning Welsh Farm

I mentioned it was coming earlier in the year, but now full details are available for Llandilo Abercowin overlooking the scenic Taf estuary in Carmarthenshire. Available for the first time in over 40 years, the 335-acre farm is loaded up with natural capital opportunities. The guide price is £5,500,000 (available in two lots). Find out more from my colleague Alice Keith.

Main photo by Sean Kinnear on Unsplash