Covid 19 – Rural property and business update
The following is a brief round-up of some of the Covid-19 and other issues affecting rural property owners and businesses
3 minutes to read
Commodity prices
Arable and livestock markets remain relatively stable, but cereal prices are walking a narrow path between a slump in demand due to Covid-19 and falling 2020/21 harvest estimates in some parts of the world – EU wheat production is forecast to drop by almost 12 million tonnes to 143 million tonnes, according to the USDA.
Rural property market back in business (In England at least)
Following the government’s announcement last Wednesday (13 May) that estate agents and valuers are now allowed to visit properties and conduct viewings again (subject of course to social-distancing requirements), the farmland market is reopening. A number of vendors keen to get their properties launched have requested they be advertised as soon as possible, so by June some semblance of normality should have returned. The amount of land advertised publicly so far this has dropped by 75% compared with 2019, in itself a year of declining availability.
It is too early to say where prices will head, a lot will depend on the view of vendors and potential purchasers as to the longer-term impact of Covid-19. Needless to say, some interesting conversations are already being had.
The Agricultural Bill and US trade deal
Last week I mentioned that MPs had a chance to show their support for UK farmers, while improving our food security post Covid-19 and Brexit, by passing an amendment to the Agriculture Bill that proposed any food imports would be required to meet the same environmental and animal welfare standards as domestic production.
The amendment was kicked out and the industry has reacted with unsurprising anger. “Despite frequent warm words, it is disappointing the government did not take the opportunity to legislate that they will not allow the imports of food that would be illegal to produce here," said the NFU’s Brexit director Nick Von Westenholz.
The bill now heads to the House of Lords.
Closely linked, concerns are also rising that the agricultural sector will be hung out to dry in the ongoing trade talks between the US and UK. The Financial Times has reported that Trade Minister Liz Truss (once the Defra Minister) is prepared to make big concessions on food imports. Ms Truss, however, denied this in an editorial written for Farmers Weekly magazine.
Obviously, though, there are always two sides to a story and many will argue that access to cheap imported food will greatly benefit those on the lowest incomes.
The Rural Sentiment Survey and Woodland Carbon
In another sneak preview from the results of our Rural Sentiment Survey, it seems tree-planting features high on the future plans of rural property owners. Worth noting then that another round of the Woodland Carbon Scheme, which allows those planting trees to sell carbon credits to the government at a guaranteed price until 2055, opens in June. £10 million is up for grabs this time. Our Forestry Investment team can help if you are interested. Just email my colleague edward.holloway@knightfrank.com
Shooting rules as the lockdown relaxes
Along with golfers and tennis players, the English shooting community, following Boris Johnson’s announcement last week on the easing of lockdown restrictions, now has more freedom to carry out its activities outdoors. The BASC has issued some guidance on what precautions need to be followed: https://basc.org.uk/coronavirus/
Help for Welsh dairy farmers
The Welsh Assembly has announced a similar support package to the one launched by DEFRA last week to help those affected by a Covid-19-driven drop in demand or price. Milk producers who lost over a quarter of their income in April and May can claim up to £10,000 to cover 70% of their lost income.