The Knight Frank Rural Property and Business Update – 19 July

Two newly published reports on the future of food and farming that I discuss below emphasise the direction that landowners and farmers will be steered in over the next decade. There is a lot of talk about the environment, healthy eating, and climate change, but very little about food security. This will disappoint some farmers who worry about the loss of land to nature-based schemes, but their emphasis now should be on identifying the most appropriate land uses for their businesses. The government’s policy trajectory seems pretty well set.

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

In this week’s update:

• Commodity markets – Opec reaches oil production agreement
• Food and farming – Tax sugar, eat less meat, says new report
• Agricultural policy – Government sets out new mission
• Farmland values – Read our latest research
• The Rural Report – Sign up to watch our ground-breaking video
• Overseas news – Climate change hits Swedish moose

Commodity markets – Opec reaches oil production agreement

Further fuel price rises could have been allayed after Opec and it’s oil-producing allies agreed last week to increase production by 400,000 barrels a day. Crude prices had spiked to almost three-year highs on the back of increased demand. While economies have been opening up again, oil output is still around six million barrels 

Food and farming – Tax sugar, eat less meat, says new report

The full version of Henry Dimbleby’s government commissioned, but independent, National Food Strategy was published last week.

Inevitably, media attention has focussed on a proposal to introduce taxes on sugar and salt and a call to cut UK meat consumption by 30%, but the report’s 14 sensible and well-considered recommendations include suggestions that should support farming post-Brexit, while boosting the health of the populations.

Its holistic approach to healthy food, farming and soil health very much chimes with the thoughts of our own Tom Heathcote, Head of Agri-consultancy. You can read them here.

Defra will respond to the report’s recommendations in its own Food Strategy White Paper, which will form part of its 2021/2022 mission statement (see below).

Read the full report

Agricultural policy – Government sets out new mission

Defra has just released its wide-ranging delivery plan for 2021 and 2022, which focuses on four key objectives:

1. Improve the environment through cleaner air and water, minimised waste, and thriving plants and terrestrial and marine wildlife
2. Reduce greenhouse gas emissions and increase carbon storage in the agricultural, waste, peat and tree planting sectors to help deliver net zero
3. Reduce the likelihood and impact of flooding and coastal erosion on people, businesses, communities and the environment.
4. Increase the sustainability, productivity and resilience of the agriculture, fishing, food and drink sectors, enhance biosecurity at the border and raise animal welfare standards

Read the full plan

Farmland values – Read our latest research

The Q2 2021 results of the Knight Frank Farmland Index have just been published. They show the average price of bare land in England and Wales rebounded by 2% in the second three months of the year to over £7,000/acre. Demand from eco-friendly buyers is helping to support values.

Read the full report

The Rural Report – Sign up to watch our ground-breaking video

This year’s edition of The Rural Report, our unique publication for rural landowners and their advisors, launched last month with a video highlighting some of its key content

around the topic of ESG. If you missed it, you can sign up to watch on demand at your leisure. It was a lot of fun making it and includes a thought provoking interview on diversity, with Wilfred Emmanuel-Jones AKA The Black Farmer. I think you’ll find it both entertaining and informative.

Sign up to watch The Rural Report launch video

Overseas news – Climate change hits Swedish elk

On a visit to a Swedish elk park at the weekend I had an interesting chat to the owner. New research, he told me, suggests that warmer climates are affecting moose fertility levels and, as a result, populations in southern Sweden may face long-term decline. Moose, apparently, need a very cold winter to prepare their bodies for reproduction and these have been in short supply over the past decade, even in Scandinavia. Hunters are also reporting that calves are becoming lighter. This could have implications for the value of forests, which are highly prized for their moose hunting opportunities.