The Knight Frank Rural Property and Business Update – 26 April

Governments often fail to see the big picture when it comes to farming. In the UK, for example, making it harder for EU workers to take up lower-paid roles post-Brexit was always going to hit the horticultural sector. The ignominious failure of the Pick for Britain campaign highlights why we needed those workers in the first place and why shutting them out will be extremely damaging. Likewise, the EU’s blanket ban on using genetic technology risks thwarting its own green ambitions. But one person who always sees the big picture is our very own Tom Heathcote. His thought-provoking words on farming’s sustainable future are well worth a read.

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 – Strong gains across the board
• Sustainable farming – Roadmap for the future published
• Farmland values – Watch our new webinar on-demand
• Scotland – New country house index data released
• Countryside stewardship – Review before rolling over
• Overseas news – Brussels urged to accept organic gene editing

Commodity markets – Strong gains across the board

Concerns about adverse weather in key production areas means wheat prices are knocking on the door of £200/t again. Meanwhile, a drop in plantings (the UK will probably only produce half of the 2 million tonnes required domestically this year) is helping to support old-crop oilseed rape prices, which are almost 45% higher than this time last year. Even new-crop prices are currently over £400/t. Livestock prices are also doing well with lambs approaching the 700p/kg mark. There is even good news in the pork sector, with prices starting to bottom out as the backlog of supply finally eases.

Sustainable farming – Roadmap for the future published

My colleague Tom Heathcote, who is Head of Knight Frank’s Agri-Consultancy team, has just published a thought-provoking essay on the importance of sustainable farming systems.

Tom, a passionate advocate of regenerative agriculture, highlights the interconnectivity between farming and nature and argues that a new approach to fixing and nurturing those connections is vital.

Read Tom’s wise words

Farmland values – Watch our new webinar on-demand

If you missed last week’s webinar on the outlook for farmland values, you can now watch it on demand. Our innovative new approach to webinars went down well with our audience. “It’s like a thinking man’s Country File - but presented by people who know what they are talking about,” said one.

Watch the webinar to see what all the fuss is about

Scotland – New country house index data released

Average prices for Scottish country houses faltered slightly in the first quarter of the year as the pandemic hit growth, according to new research from Knight Frank.

However, lockdown restrictions – schools have only just gone back north of the border – have also created an imbalance between supply and demand, which should support values over the rest of the year.

While new prospective buyers increased by 28% in Q1 2021, compared with the five-year average, the number of sales instructions was down 11%.

Read the full report

Farm labour – Fruitless scheme squashed

Defra has canned its Pick for Britain scheme that was introduced last year to mitigate the impact of Covid-19 on the overseas’ labour needed to harvest the UK’s fruit and veg crops. Few Brits felt inclined to sign up for duty on the nation’s farms, and those that did answer the call usually didn’t last long labouring in fields and pack houses.

Brexit has already made it much harder for horticultural businesses to access the labour they need. The sector is warning that the Seasonal Workers Pilot Scheme, which will offer temporary visas to 30,000 farmworkers, is not enough to fill the estimated 70,000 to 80,000 roles for pickers and packers.

Countryside stewardship – review before rolling over

Many of those whose Countryside Stewardship schemes expire at the end of this year will be able to apply to join a new five-year agreement mirroring their current arrangements, Defra has announced.

However, despite the convenience, Tom Heathcote, Knight Frank’s Head of Agri-Consultancy, advises all claimants to review their schemes before rolling over as “other options maybe more suitable”.

Read the full criteria for establishing a mirror agreement

Overseas news – Brussels urged to accept organic gene editing

The EU has taken a tough stance on the introduction of genetically modified crops while calling for 25% of farmland to become organic by 2030, but a new paper argues that the bloc’s organic sector risks a stall in productivity gains if the adoption of gene-editing technology is not allowed.

"Expanding organic farming further under the current legal restrictions on biotechnology could easily lead to less sustainability instead of more. Yet gene editing in particular offers great potential for sustainable agriculture," says Kai Purnhagen, lead author of the study and professor of German & European Food Law at the University of Bayreuth.

Read the full paper

Photo by Connor Mollison on Unsplash