Although agriculture was the only sector of the UK economy not to have shrunk in the final quarter of 2008, farming is not set for an easy ride in 2009, says a new report. Knight Frank’s latest agriculture report says that the decline of sterling makes UK cereals and meat products more competitive on the world market, but falling international commodity prices mean many arable farmers will struggle to make money from the 2009 harvest.
* More news on the property market and house prices
According to the Knight Frank farmland index, farmland prices have already reacted negatively to this predicted fall in incomes and the general lack of confidence in property markets.
Andrew Shirley, Knight Frank’s head of rural property research, said: ‘The long-term outlook for UK agriculture is positive, but we shouldn’t assume that one quarter of positive growth means farming is in for an easy ride this year. There will be significant economic and regulatory changes that will have to be overcome.’