Farming News - Drop in meat-eating not Brexit could cut farmland value

Drop in meat-eating not Brexit could cut farmland value

A drop in meat consumption – not Brexit – could cut the value of farmland, it is claimed.

The warning comes from property consultancy Galbraith, which last year marketed more than 100 agricultural sites with a combined value of more than £100 million.

The agency has dismissed predictions that Brexit will lead to a sudden drop in prices.

On Monday property experts Savills said commercial farmland values could fall by 18% over five years as common agricultural policy subsidies are withdrawn.

Those concerns are linked to worries over financial support for farming after the UK leaves the EU’s subsidy programme.

Worth £3 billion a year, direct payments from the EU represent around 60% of the profit made by the UK’s farmers. This rises to 90% for hill farmers.

The subsidies are paid by land area and, while the detail of the system set to replace this not yet known, it is expected to reward those whose activities also yield eco benefits.

However, Galbraith partner Ian Hope says Brexit poses less risk to market values than interest rates – but dietary changes could see sellers in the livestock sector bring home less bacon for their land.

Hope said: “If interest rates rise, that will be a much bigger threat to the farmland market than any changes to farm subsidies which may occur post-Brexit.”

He went on: “We anticipate there may be a slight reduction in supply to the farmland market in 2019 driven by continued uncertainty due to Brexit, which is actually likely to maintain farmland values. We do not anticipate any significant price rises or falls in the coming years but expect land values to show flat or slight growth in the long term.”

However, Hope continued: “There is scope for a potential fall in land prices in the livestock sector, perhaps partly due to changes in consumer lifestyles and reduced meat consumption, but farmers in these sectors are already adapting to the ever-changing market place.”

The comments come one week after bakery chain Greggs hit the headlines with the launch its meat-free sausage roll, in response to the growing vegan market.

Last year consumer research panel Kantar Worldpanel reported that 29% of the UK’s evening meals contained no meat or fish in 2017, with sales of meat-free ready meals up by 15% year-on-year as of last January. And a report from supermarket chain Waitrose in November suggests one in seven adults has cut meat out entirely.

Live animal exports from Scotland fell by more than 26% from 2016-17, although overseas sales of meat grew slightly to reach a value of £99m.

Hope said: “Whether it be switching to added value produce, diversification, renewable energy production or new environmentally friendly farming practices, farmers have a history of adapting and will continue to do so.”