It has been a busy week...

It has been another busy week with meetings in Taunton, Bristol, Oxford, Reading, the Dairy Dinner, Carter Jonas’ National Rural Division Day and two charity events on the weekend.  

After seven days like that I often sit and ask what if anything I have learned. In this case it was the huge range of fortunes affecting the rural world. 

The woes of the dairy sector are well known to us all, although NFU President Meurig Raymond spoke at the Dairy Dinner of cautious optimism.  He alluded to the price rises in recent international milk commodity auctions giving hope that these increases will eventually feed through to the milk price being paid to our farmers.

It was also interesting to hear at a breakfast meeting that the bank managers there had not seen any significant financial problems with the majority of their farming clients.  This came as a surprise and I suspect if I sit with the same bank managers in six months, they may have a different story to tell, especially if receipt of the Basic Payments are delayed until February or March as many expect.

I then went on to Carter Jonas’ Rural Division Day where we considered the land market, among other topics, and the overwhelming sentiment was that the price of sizeable blocks of quality agricultural land remain firm.  

Demand for such land is increasingly being driven by “rollover money” as farmers and landowners who have sold land for development are looking to re-invest in agricultural land, thereby rolling over the capital benefit and avoiding the payment of Capital Gains Tax in the short term.

But also true is that the land market is extremely local and values often vary hugely across short geographic distances as can be seen here in Somerset with some “flood affected” land on the Levels being worth not much more than £3,000/acre with land in places on surrounding higher ground worth three or four times as much.  This makes the valuation of land very difficult and local knowledge increasingly important.

So, while some farmers and landowners are prospering, others are struggling and as with the land market, their fortunes can be very local – one farmer may have benefited from a good milk contract or the sale of development land while their neighbour has not.  

Sometimes this may be just good or bad luck but there are individuals with the habit of attracting good fortune. Perhaps others should learn from the business attitudes of these “lucky ones”. 


James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk