Omicron hits grain, CLA conference, green support

It was fantastic to be part of the CLA’s annual Rural Business Conference last week, both with Knight Frank being the lead sponsor and watching a number of my colleagues speak at the event. Despite Covid-19 concerns, around 500 delegates heard some excellent presentations and clearly enjoyed meeting again in person. Soil, soil, soil was the mantra of many of the speakers. Improving what is, after all, the fundamental basis for most farming enterprises will be vital to help the UK hit its climate change commitments and ensure a productive future for agriculture. The importance of livestock as part of regenerative agricultural systems was also stressed. 

Do get in touch if we can help in any way
Andrew Shirley, Head of Rural Research

In this week’s update:

• Commodity markets – Omicron hits grains
• Farm support – New scheme details released
• Politics 1 – Former farming minister takes aim
• Politics 2 – Labour environment shadow replaced
• Trade 1 – Agri-food champions announced
• Trade 2 – UK Lamb back on US menus
• The Rural Report – Sign up to watch our ground-breaking video
• Overseas news – German Greens take ag portfolio

Commodity markets – Omicron hits grains

According to grain trader Frontier: “Wheat markets have endured a volatile week of trading, as traders and speculators reacted to the uncertainty of the latest Covid-19 variant Omicron and what it might bring. Having peaked at nine-year highs last week, Chicago Board of Trade (CBOT) wheat futures lost over 10% of their value by close of business on Tuesday. This was due to a wave of panic selling, which caused prices to tumble. European wheat futures made similar losses from their record highs last week.” Longer term though, an imbalance between supply and demand should ensure prices remain firm next year, reports the AHDB.

Farm support – New scheme details released

Defra minister George Eustace used his speech at the Knight Frank-sponsored CLA annual Rural Business Conference last week to announce more details around the payment rates for the Sustainable Farming Initiative (SFI) The SFI makes up one third of a trio of environmental support schemes that will form the basis of the government post-Brexit support for farmers.

Farmers will receive payment for taking actions that generate environmental benefits, such as improving grasslands or soils. With nearly 1,000 farmers signed up to the pilot, the new scheme will now be rolled out to farmers who farm more than five hectares of land and are eligible for the current Basic Payment Scheme next year.

Tom Heathcote, Head of Agri-Consultancy at Knight Frank, who also spoke at the conference, comments: “Some of the payments are lower than expected, so it’s not perfect. But it’s a start, farmers should get involved, work with it, feedback and be part of the process.” For advice on how the SFI could work for you please contact Tom.

Politics 1 – Former farming minister takes aim

Lord Deben, perhaps better known to many as John Gummer, the Minister of Agriculture during the BSE crisis in the 1990s, meanwhile gave an impassioned and well-received speech to delegates, as well as to guests at a Knight Frank event the night before.

The Chairman of the UK's independent Committee on Climate Change stressed how vital it was for the UK to hit its net zero commitments with agriculture playing its part, but lamented the lack of detail from the government on the support that would be provided to farmers.

The loudest cheer came when he piled the pressure on the following speaker George Eustace by lambasting the recent trade deals struck with Australia and New Zealand that could allow food imports produced to lower standards than those required of the UK’s farmers: “We need fair trade as well as free trade. I am sure the Secretary of State will be explaining that to Liz Truss (Trade Minister).”

Politics 2 – Labour environment shadow replaced

Mr Eustace, however, is at least still in post. His opposite number on the Labour front bench Luke Pollard, who was also due to speak at the CLA’s conference was dumped last week by Kier Starmer. His replacement Jim McMahon was unable to attend in his place, so was substituted by farming minister and Cambridge MP Daniel Zeichner who conceded that Labour had dropped the ball when it came to the countryside. He didn’t though provide many details on how the party would support the agricultural sector if it won power again.

Trade 1 – Agri-food champions announced

The government has just announced that it is adding eight new agri-food and drink attachés in priority markets, as part of a wider plan to boost exports, further unlock barriers to trade and open up new exporting opportunities around the world.

As well as posts in China, USA, India, Canada and Mexico, the agri-food attachés will be covering growth markets in the Gulf, Africa, South America and the Asia-Pacific region. There will also be additional capacity and resource in Europe.

Trade 2 – UK Lamb back on US menus

Defra has confirmed that UK lamb exports to the US can resume from 3 January after a twenty-year hiatus. The new trade is expected to be worth £37m over the next five years.

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 – German Greens take ag porftolio

It could be worth keeping an eye on German agricultural policy over the next few years following the awarding of the farming brief to the designated Green Minister for Agriculture and Food Cem Özdemir as part of the country’s new three-way power-sharing agreement. Although the EU has already targeted climate change and biodiversity as its key deliverables over the next five years, Germany may now want to go further faster. That said, Germany’s meat sector is one of the EU’s most industrialised, so “greening” it will not be easy politically or economically. This round up has all the details.

Photo by Jonny Gios on Unsplash