Tag Archives: decade
Price Of Farmland Trebles In Decade And ‘Set For £10k An Acre’
The price of UK farmland has trebled in less than a decade to hit a record high, according to a new survey, as researchers predicted the average price of an acre could soon hit £10,000. Prices for farmland are climbing, a new survey shows. Photo: Alamy By Emma Rowley 7:00AM BST 23 Aug 2013 Interest from farmers and investors buying to rent land to farmers pushed the cost of farmland to £7,440 an acre across the UK in the first six months of this year – three times the price fetched during the same period in 2004, when an acre cost just more than £2,400. Commercial farmers want to expand production to take advantage of the long-term trend for rising food prices and economies of scale, according to researchers at the Royal Institution of Chartered Surveyors (RICS), who produced the data. While commodity prices have eased in recent months, demand for food is expected to remain on an upwards path in the long term, driven by growing populations and changing diets around the world. The appeal of farmland as a “safe haven” investment to rival gold also plays a part, researchers said. Farmland has outperformed a number of alternative asset classes, which – combined with tax breaks – has enhanced its appeal as an investment. Analysis by estate agents Knight Frank has shown that for years gold was the only asset to outperform farmland, but in the short term this situation has reversed as the price of the precious metal has weakened. “The growth in farmland prices in recent times has been nothing short of staggering,” said Sue Steer, spokeswoman for RICS. “In less than 10 years, we’ve seen the cost of an acre of farmland grow to such an extent that investors – not just farmers – are entering the market. “If the relatively tight supply and high demand continues, we could experience the cost per acre going through the £10,000 barrier in the next two to three years.” The most expensive farmland was found in the North West – where supply is tight – at £8,813 an acre, the RICS survey showed, while the cost was lowest in Scotland, at £4,438 an acre. None the less, prices north of the border touched record levels for the Scottish market. Some areas are already past the £10,000 mark, surveyors said. A 13.5 acre block of land near Antrobus near Northwich, which was suitable for potatoes, recently went for well over £12,000 an acre, said Andrew Wallace at Cheshire-based auctioneers Wright Manley. He reported “keen farmer competition for extra land”. Graham Bowcock, a surveyor, said last year’s wet summer and a tough winter and spring that followed did not seem to have diminished the appetite for land purchase. “The big [farmers] still want to get bigger but continue to be hampered by shortage of supply,” he said. “There are plenty of non-farmers waiting in the wings and many seem to have cash available.” On a long-term perspective, the demand for farmland looks likely to increase further around the world due to the finite supply of arable land and population and consumption trends. Analysts also say that rising demand for land for renewable energy sources such as biofuels will compete against food production, further increasing pressure on arable land. Against this backdrop, food prices will stick above their historical average over the medium term for both crop and livestock products as demand grows and production slows, according to a recent report published by the OECD think tank and the UN’s food agency. The twice-yearly RICS rural market survey, which began in 1995, tracks market prices for farmland across England, Wales and Scotland. Continue reading
São Paulo Eyes Biomass Boom
[background=rgb(0, 128, 1) !important]29/07/2013[/background] The Brazilian state of São Paulo is predicting a major increase in biomass-powered electricity this decade and beyond. The state government’s latest energy strategy identifies sugar cane fired generation plant as a major growth area to help hit a new 69% renewable energy target by 2020. Combustion of cane residues is set to rocket from 2565MW in 2010 to 8.6GW by the end of the decade. This will leap further to 17.2GW by 2035. Other biomass fuels are also set to rise in the 2010 to 2035 time period. Forestry by-products will grow from 591MW to 1431MW, energy from waste will increase from zero to 391MW, and biogas will aim to expand from 62MW to 157MW. Wind energy will play its part with 457MW to be installed over the next 22 years from a standing start in 2010. Governor Geraldo Alckmin (pictured) said the expansion will cement São Paulo’s position as the Brazilian state with the highest percentage of renewable energy. Image: São Paulo government / Edson Lopes Jr Continue reading
Slower Global Agricultural Production In Next Decade But Prices Above Historic Average, Says FAO
Global agricultural production is expected to grow 1.5% a year on average over the coming decade, compared with annual growth of 2.1% between 2003 and 2012, according to a new report published by the OECD and FAO released this week. Limited expansion of agricultural land, rising production costs, growing resource constraints and increasing environmental pressures are the main factors behind the trend. But the report argues that farm commodity supply should keep pace with global demand. The OECD-FAO Agricultural Outlook 2013/2022 expects prices to remain above historical averages over the medium term for both crop and livestock products due to a combination of slower production growth and stronger demand, including for bio-fuels. The report says agriculture has been turned into an increasingly market-driven sector, as opposed to policy-driven as it was in the past, thus offering developing countries important investment opportunities and economic benefits, given their growing food demand, potential for production expansion and comparative advantages in many global markets. However, production shortfalls, price volatility and trade disruption remain a threat to global food security. The OECD/FAO Outlook warns: “As long as food stocks in major producing and consuming countries remain low, the risk of price volatility is amplified. A wide-spread drought such as the one experienced in 2012, on top of low food stocks, could raise world prices by 15-40%”. China, with one-fifth of the world’s population, high income growth and a rapidly expanding agri-food sector, will have a major influence on world markets, and is the special focus of the report. China is projected to remain self-sufficient in the main food crops, although output is anticipated to slow in the next decade due to land, water and rural labor constraints. Presenting the joint report in Beijing, OECD Secretary-General Angel Gurría said: “The outlook for global agriculture is relatively bright with strong demand, expanding trade and high prices. But this picture assumes continuing economic recovery. If we fail to turn the global economy around, investment and growth in agriculture will suffer and food security may be compromised”. “Governments need to create the right enabling environment for growth and trade” he added. “Agricultural reforms have played a key role in China’s remarkable progress in expanding production and improving domestic food security”. FAO Director-General José Graziano da Silva said: “High food prices are an incentive to increase production and we need to do our best to ensure that poor farmers benefit from them. Let’s not forget that 70% of the world’s food insecure population lives in rural areas of developing countries and that many of them are small-scale and subsistence farmers themselves”. He added: “China’s agricultural production has been tremendously successful. Since 1978, the volume of agricultural production has grown almost five fold and the country has made significant progress towards food security. China is on track to achieving the first millennium development goal of hunger reduction. While China’s production has expanded and food security has improved, resource and environmental issues need more attention. Growth in livestock production could also face a number of challenges. We are happy to work with China to find viable and lasting solutions.” Driven by growing populations, higher incomes, urbanization and changing diets, consumption of the main agricultural commodities will increase most rapidly in Eastern Europe and Central Asia, followed by Latin America and other Asian economies. The share of global production from developing countries will continue to increase as investment in their agricultural sectors narrows the productivity gap with advanced economies. Developing countries, for example, are expected to account for 80% of the growth in global meat production and capture much of the trade growth over the next 10 years. They will account for the majority of world exports of coarse grains, rice, oilseeds, vegetable oil, sugar, beef, poultry and fish by 2022. To capture a share of these economic benefits, governments will need to invest in their agricultural sectors to encourage innovation, increase productivity and improve integration in global value chains, FAO and OECD stressed. Agricultural policies need to address the inherent volatility of commodity markets with improved tools for risk management while ensuring the sustainable use of land and water resources and reducing food loss and waste. China’s consumption growth is expected to outpace its production growth by some 0.3 percent per year, signaling a further but modest opening of China’s agricultural sector, the report said. China’s imports of oilseeds are expected to rise by 40 percent over the next ten years, accounting for 59% of global trade. Both the meat and dairy sectors will continue to expand which will result in higher imports of feed grains. China is expected to become the world’s leading consumer of pig-meat on a per capita basis, surpassing the European Union by 2022. China should maintain its leading role in global aquaculture at 63% of global production and remain the largest fish exporter. China is projected to remain self-sufficient in the main food crops, although output growth is anticipated to slow in the next decade. Key uncertainties around the agricultural outlook for China should be closely monitored and addressed, the report said. These include the sustainability of high levels of economic growth, increasing resource constraints on production, land degradation and water depletion, and greater production variability due to climate change. According to FAO estimates, China’s food security has improved with the number of undernourished falling by almost 100 million since 1990, despite adding an additional 200 million people to its population. Ensuring the food security of the estimated 158 million persons still undernourished remains a major challenge, the report. Continue reading
