The Knight Frank Rural Property and Business Update – 25 January

In this week’s update:

• Commodity prices – Mixed fortunes for livestock farmers
• Planning – LPAs miss housing targets
• Agricultural support – Money isn’t everything
• Communication – Standing up for farming
• Farmland market – Download new research
• Covid-19 – Farming and business update
• International news – Australian farm plans huge solar diversification

Commodity markets – Mixed fortunes for livestock farmers

Lamb prices continue to surge to new highs, up over 15% on the year. However, not all livestock farmers are doing as well. A commensurate rise in grain prices is hurting those in the pig, poultry and dairy sectors. With margins already under pressure across Europe following the Chinese ban on German pig meat and a reduction in processing capacity due to Covid-19 workforce issues, pork farmers are seeing their margins badly eroded as feed costs rise sharply.

Planning – Councils missing housing targets

Some 55 local planning authorities (LPAs) delivered less than 75% of their housing requirement in the three years to March 2020, according to the latest Housing Delivery Test from the Ministry for Housing, Communities and Local Government’s (MHCLG), writes my research colleague Oliver Knight.

Roland Brass, a partner in Knight Frank’s planning team comments: “Beyond the Local Plan position, many of the presumption authorities are covered by Green Belt which might mean that the delivery test results might have a limited impact on the ground.

“In spite of this, it is clear that a consistent and flexible housing land supply is clearly vital to achieve strong housing delivery over time.

This demonstrates the importance of council’s having up to date Local Plans, and, given that many plans are expected be advanced and consulted upon this year, it will be important for rural landowners to ensure that any potential development opportunities – both urban and rural – are promoted to local authorities.”

Find out which LPAs have missed their targets

For help on any planning matters please get in touch with Roland

Agricultural support – Money isn’t everything

Farmers trialling the new Environmental Land Management Scheme (Elms) say the government will need to fork out significantly more money than was made available under the Countryside Stewardship schemes to make it worthwhile participating.

The feedback is included in Defra’s latest quarterly Reports on the progress and main findings of the Environmental Land Management (ELM) scheme tests and trials.

However, Tom Heathcote, Head of our Agri-Consultancy Team says money is only part of the equation.

“Through the Agricultural Transition Plan the government sets out some of the ways that it plans to use financial stimulus and investment to reform the agricultural sector. But financial support is only one part of this though.

“Without knowledge and understanding businesses will struggle to implement change. As part of the transition I hope that the government will recognise the need for investing in knowledge as this is vital for a smooth transition.”

For more of Tom’s insight read his recent opinion piece in the Farmers Guardian. Agree or disagree? Join the debate on Linked In or get in touch with him directly.

Communication – Making the case for farming

As if Veganuary wasn’t enough for livestock farmers to endure, an advertising campaign for Oatly, which is promoted as an alternative to milk, has raised their hackles.

The TV ads, which feature dads being shamed by their kids for drinking proper milk (guilty as charged my lord), have been accused of misleading consumers by using discredited data that says farming emits more greenhouse gases than transport.

What I find unsettling is the binary nature of such initiatives. Oatly good, milk (and by association those that produce it) bad. Another example was an otherwise interesting webinar about the cultured meat industry that I joined last week.

I included a feature on cultured meat in the latest issue of The Rural Report because I believe it will have an important role to play in the future of food, perhaps relieving the burden on land and ocean resources or replacing some intensively reared meat.

But in the minds of the webinar’s participants there was no place for a balanced approach. Again it was cultured meat good. Farms bad. And the evidence to back up their assertions was flaky at best.

Criticism of the livestock sector tends to revolve around its contribution to climate change and welfare issues, but neatly sidesteps the fact that many the latest environmental buzzwords like rewilding, regenerative agriculture and agro-ecology are based around mixed farming systems. Or that many of the UK’s best-loved landscapes were created by animal-based farming systems.

As we pointed out in The Rural Report it is vital that the industry, while not shying away from the need to adapt and improve, does a better job of communicating British farming’s positive contribution to health and the environment. And offering a balanced perspective – there is room for Oatly and milk.

Farmland market – download new research

Our latest report on agricultural land values is now available to download. It includes historic price trends and comparisons with other asset classes, as well as some thoughts on the future outlook for land prices. If you need help with any rural property valuation matters please contact Alice Huxley.

Covid-19 – Farming and business update

From tenancy legislation to furlough schemes, Lockdown 3.0 brings with it a plethora of things that rural business owners need to get their heads around. Again. To help, Georgie Veale of our Rural Asset Management team has pulled together a handy guide to all things lockdown. If there is anything you are still unsure of please do drop Georgie a line as she’d love to help.

International news – Australian farm plans huge solar diversification

Australia’s Consolidated Pastoral Company (CPC), one of the country’s biggest farming businesses, has said it is in talks to host what would be the world’s largest solar park on one of its Northern Territory properties. The 12,000-ha site would be linked to Singapore by an undersea cable supplying 20% of the city nation’s electricity.

CPC farms runs around 300,000 cattle across 3.5 million hectares in Western Australia, the Northern Territories and Queensland, but is looking to diversify into cropping and other ventures, says CEO Troy Setter. Profits were hit by Australia’s recent severe drought.

Main photo by Lauren McConachie on Unsplash