Backing British food and farmers

Backing British food and farmers

Viewpoint

If Defra Minister Steve Reed is hoping that new rules to make the public sector buy more British food (see article below) will secure him a warm reception at this week’s NFU conference, he could be disappointed. Although a welcome move, the commitment is long overdue and the very least a government could do to support its domestic food producers. The NFU, CLA, TFA and CAAV are still smarting from another futile meeting last week with Defra and Treasury officials. The organisations’ eminently sensible and revenue-neutral suggestions to mitigate the impact of the Inheritance Tax raid on farming businesses announced in last year’s Autumn Budget were once again snubbed. The TFA’s George Dunn said the meeting was one of the “least productive I’ve had in the past 20 years”. Mr Reed will need to do much more to regain the trust of the industry, with farmers set to descend on London for another large protest rally on 4 March.

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In this week's update

·????? Red meat inflation hike

·????? Wheat futures up

·????? Public sector food boost

·????? Farm numbers crash

·????? Scots’ public wants lynx

·????? Support for spud farmers

·????? EU farming vision launched

·????? Win wine with salary survey

·????? Property of the week

·????? Development land Q4 2024 – Housing delivery down

·????? Country houses Q4 2024 – Market weakens

·????? Farmland Q4 2024 – Prices resilient

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Commodity markets

Red meat inflation hike

The surge in the cost of beef and lamb, the farmgate price of which has risen by 27% and 7%, respectively, over the past 12 months, has been partly blamed for an unwelcome jump in annual inflation. The Consumer Price Index rose by 3% in January, up from 2.5% in December, which was a bigger jump than most analysts were expecting. Other factors that contributed were the imposition of VAT on private school fees and airfares. The hike means a spring cut in interest rates has become less likely, but two base-rate reductions are still predicted by the end of the year.

Wheat futures up

Arable farmers will want to keep a careful eye on grain markets. While old-crop wheat prices remain in the doldrums, the futures market for the 2025 harvest hit a three-month high last week. £200/t for November delivery was available at one point, although prices subsequently slipped back slightly. For those with ample storage and sufficient cash flow, £208/t is on offer for July 2026 delivery.

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The headline

Public-sector food boost

Defra Minister Steve Reed is set to announce new targets for public-sector food procurement at today’s (25 February) NFU conference.

Mr Reed will tell delegates that Labour plans to deliver on one of its manifesto pledges by ensuring that at least 50% of the food served in places like hospitals, prisons and schools comes from UK farms or hits the same high welfare standards.

The public sector spends an estimated £5 billion on food each year, so the move is a welcome boost. “The government is committed to using its own purchasing power to back British produce,” Mr Reed said. “That means buying more British food where we can.”

Red tape will also be cut to allow smaller producers easier access to public-sector contracts, he added.

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News in brief

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Farm numbers crash

New data compiled by the Liberal Democrat Party reveals the extent of the consolidation of the English farming industry over the past 18 years. Since 2005, there has been a drop of over 30,000 holdings – a reduction of about 23%. The number of dairy farms alone has more than halved from almost 19,000 units to barely 9,000. Party leader Ed Davey said: “British farmers are the backbone of the economy, yet successive governments have done nothing but neglect them.”

Scots’ public wants Lynx

A new survey published last week reveals that the Scottish public disagrees with the country’s leadership regarding the reintroduction of lynx. According to the poll undertaken by the Lynx to Scotland partnership, 61% of people would like to see the big cats back in Scotland, an increase of 9% compared with a similar survey in 2000. However, First Minister John Swinney recently said that the Scottish Government was against the reintroduction of any large carnivores such as lynx and wolves.

Support for spud farmers

Chip manufacturer McCain, which is the UK’s largest potato buyer, has said it will provide an extra £30 million of support for growers over the next two years to help them cope with the impact of increasingly volatile climatic conditions. A survey of 100 of the firm’s suppliers found that 57% had already seen their yields cut due to climate change.

EU farming vision launched

The European Commission’s new roadmap for the future of farming and food has been criticised by environmental groups for its lack of emphasis on nature and sustainability. Launched last week, Vision for Agriculture and Food sets out “an attractive, competitive, resilient, future-oriented and fair agri-food system for current and future generations of farmers and agri-food operators”. This, it says, will involve a simpler and more targeted Common Agricultural Policy (CAP) directed at active farmers.

English whisky designation

Farmers in England wishing to go into the spirits business are set to get a boost if a recent application to designate English Whisky as a protected Geographical Indication is approved. According to the application, English Whisky is defined as: a whisky made from UK grain at an English distillery using water local to the distillery for distilling and mashing and matured in England. English Whisky is a product that epitomises a strong sense of place and provenance with all production processes (except bottling) undertaken exclusively in England.

Win wine with salary survey

The 2025 Knight Frank Estate Staff Salary Survey provides an invaluable benchmark for estate owners on current staff salaries. Please note that the survey is anonymous, but participants can choose to opt into a prize draw for two cases of Chapel Down English wine. To take part and find out more, please click here.

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Property of the week

Cotswold views

Chapel Farm

Chapel Farm at Redmarley on the Gloucestershire/Herefordshire border is a compact, newly launched 100-acre estate. It includes a seven-bed period, but not listed, house, equestrian facilities and a range of agricultural buildings. The guide price for the whole is £3.25 million. Please contact Christopher Dewe for more details.

Discover more of the farms and estates on the market with Knight Frank

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Property markets

Development land Q4 2024 – Housing delivery down

Only 2% of the 50 housebuilders recently surveyed by Knight Frank believe that the sector will deliver the 300,000 new homes that the government is targeting for 2025. The gloomy prognosis is contained in the latest instalment of Knight Frank's Residential Development Land Index report, compiled by researcher Anna Ward, which reveals that the price of green and brownfield development land remained flat in the final quarter of the year, despite Labour’s ambitious housebuilding targets and planning reforms.? Download the full report for more insight and data.

Country houses Q4 2024 – Market weakens

The price of houses in rural areas slipped by 0.3% in the final quarter of 2024, according to the latest results from the Knight Frank Prime Country House Index. Overall, values fell by 0.9% during the year. Demand for homes in the countryside has continued to fall since the Covid-19 pandemic, points out Head of UK Residential Research Tom Bill. Exchanges in 2024 were down 20% on the five-year average, he says. However, prices are expected to rebound by almost 18% over the next five years, Tom predicts.

?Farmland Q4 2024 – Prices resilient

The farmland market edged up slightly during 2024, according to the latest results from the Knight Frank Farmland Index, which tracks the value of bare agricultural land in England and Wales. Average values started the year at £9,152/acre and, heading into 2025, stood at £9,164/acre, a slight rise of 0.1%. Given the challenges that the farming industry has faced over the past 12 months, this shows the inherent resilience of agricultural land as a multi-functional asset class. Prices, however, did dip in Q4 after Inheritance Tax reforms on farmland were announced as part of the Autumn Budget. ?For more insight and data please download the full report.

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