Biden beefs, Pig producers lament, Land market languishes

According to the Knight Frank Farmland Index, the average value of bare land rose by 10% in 2021. Even this bounce back, however, hasn’t been enough to tempt many more new sellers to test the market. It’s still early in the season, but the volume of land advertised publicly is already well down on 2021 and spring proper looks unlikely to bring a flood of new properties. Economic fundamentals suggest strong demand and rising prices should result in increased supply, but so far that isn’t happening. As a result, prices should remain strong.

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Andrew Shirley, Head of Rural Research

In this week’s update:

• Commodity markets – Pork support plans not delivering
• Farmland market – Slow start to 2022
• Countryside Stewardship – IHT exemptions updated
• Rewilding – A nuanced perspective on our podcast
• The Rural Report – Sign up to watch our ground-breaking video
• Overseas news – Biden backing small beef producers

Photo by Kameron Kincade on Unsplash

Commodity markets – Pork support plans not delivering

Government measures to help struggling pig producers are not delivering, according to industry representatives invited to a Defra “summit” on the crisis. A temporary visa scheme to encourage more EU butchers to come to the UK to help boost processing capacity issue is too complicated and restrictive, they argue. The same applied to the government’s slaughter incentive payment initiative and its private storage aid scheme. According to Farmers Weekly, some producers have been receiving as little as 70p/kg deadweight for their pigs. Farmers, meanwhile, are complaining about the increase in foreign pork on supermarket shelves. Farm Minister Victoria Prentis has committed to reviewing the fairness of the pork supply chain.

Farmland market – Slow start to 2022

So far this year under 500 acres of land and farms have been advertised in Farmers Weekly, an 83% drop on 2021. Demand, however, remains exceptionally strong, according to Annabel Blackett of our Farms & Estates team. “We are getting enquiries from all types of buyers, from those looking to rewild to those with rollover funds to reinvest. But at the moment pretty much everything we had on our books has been sold or is under offer.”

However, a number of attractive estates are due to be launched at the end of March or in early April, says Annabel. “There is stock coming to the market, but potential vendors seem happy to take their time, despite average land values recovering strongly over the past 12 months.”

Countryside Stewardship – IHT exemptions updated

Defra has just published an update to its guidance on which Countryside Stewardship options and capital items may be available on land designated by HM Revenue & Customs as conditionally exempt from Inheritance Tax or as the object of a Maintenance Fund, depending on the specific undertakings and proposed options or capital items.

Rewilding – A nuanced perspective on our podcast

We have received some great feedback on our recent Knight Frank Intelligence Talks podcast where Tom Heathcote, Head of our Agri-Consultancy team, and I discuss rewilding and the government’s plans for landscape restoration and environmental support payments for landowners and farmers. If you haven’t tuned in yet have a listen to see if you agree with our thoughts on this increasingly controversial topic.

The latest edition of The Rural Report, our unique publication for rural landowners and their advisors, was launched 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 – Biden backing small beef producers

For anybody worried about the dismemberment of the UK’s network of small, local abattoirs, this article highlights the global scale of the problem and what it means for family farms and processors. In the US, Joe Biden is attempting to break the stranglehold of the country’s four big meatpackers on the sector. He hopes it will bring down meat prices for consumers struggling with the highest food price inflation in decades. Smaller producers though may well argue that years of low prices that don’t reflect their costs of production have been part of the problem.

Photo by Saksham Gangwar on Unsplash