British farmers tend not to be known for their cheeriness. But at the Melton Mowbray cattle market in England’s undulating green Midlands area, where cows, sheep, and chickens are traded, even the most taciturn farmers admit that their business is a good one to be in these days.
“Things are better, that’s for sure,” said one white-haired farmer dressed in a battered wax jacket, as he watched a herd of glossy brown cattle stomping around an auction hall.
Cows typically fetch twice the price they did in 2006, when Stuart Hampson, then president of the Royal Agricultural Society of England, spoke of a “deep-seated crisis” in British farming. His words followed years of trouble: from a foot-and-mouth crisis to supermarkets’ stranglehold over producers.
A surge in commodity prices, especially wheat, hitting $314 a ton last year compared to $125 three years earlier, is underlying their change of fortune and attracting young people to the profession. But booming land prices are making it difficult for them to enter the fray.
“There’s much more optimism in farming generally,” says Richard King, a farming consultant at the Anderson Centre in Melton Mowbray, Britain. “There’s a feeling that rising commodity prices are a symptom of improved prospects for farmers, with a rising population and tighter supply.”
The demand is driven by emerging markets like China, where people are increasingly putting grain-fed meat on their plates instead of rice. Items traditionally popular in the West, including bread, are expected to become popular in other parts of the world as well.
The United Nations food agency estimates that the world will need to up its cereals production by 1.1 billion tons and produce 220 million extra tons of livestock products every year to feed what will be a global population of 9 billion people by 2050, and satisfy the demand for biofuels.
The most dramatic indication of farming’s new boom is the rise in the price of British farmland, which has, on average, trebled to around $9,500 an acre over the past decade.
By 2016, British farmland prices will increase by 37 percent, beating forecasts for gold, government bonds, and London property, according to research published last month by Oxford Economics, an economic forecasting consultancy, and the research arm of Savills, a property consultant.
The growth has been fuelled by a scarcity of land on the market: less than a half-percent of the total land farmed in Britain was up for sale in 2011.
Investors, looking for a safe haven for their cash in troubled times, are also helping to push up prices. Grain, a non-governmental organization that promotes the sustainable use of the world's resources, estimated that between $5 and $15 billion of pension fund money was invested in global farmland last year, a figure it said would double by 2015.
Many investors prefer developed markets, sensitive to possible incidents of "land grabs" in Sub-Saharan African states and other developing countries. For independent investors, British farmland is an especially attractive option because it can offer relief from burdensome taxes.
Land agents, however, report that farmers still constitute a majority of the buyers of farmland. “It’s that age-old thing of wanting that field just over the hedge,” says Mr. King.
Rising prices affect farmers in less positive ways as well. Arable farmers are quick to cite the cost of fertilizer, while livestock farmers complain about the price of feed. But banks are quicker to give credit to farmers than they are to almost any other business.
“Farmers are one of the very few primary producers to which banks are happy to lend because they see land as a safe bet,” says Giles Wordsworth, partner in Smiths Gore, a rural property consultant.
Young people, who only a few years ago would have laughed at the idea of going into farming, now see it as a serious career option. Over the last two years, agriculture courses saw the biggest increases in university enrollments, according to the Higher Education Statistics Agency.
But if you don’t come from a farming family that either owns or rents land, getting started is far from easy.
“We knew we wanted to farm but [also] knew we had no prospect of buying land with prices so high,” says Camilla Puzey, who recently took on the tenancy of 250 acres in Oxfordshire, where she and her husband Roly raise sheep.
After a long and fruitless search for some land to rent, the couple was lucky to be offered cheap land for rent by an environment charity. “Getting the land is the real struggle,” says Ms. Puzey.