Rosier outlook in prospect

"Life is looking rosier for farmers. Wheat prices are soaring and land prices are booming" says Mark Laws from the Shrewsbury office of property consultants Carter Jonas.

The farming industry, he says, with the exception of the livestock sector, is now turning the corner with profits recovering as a result of increasing world prices for cereals and mounting interest in alternative energy crops.

World wheat prices rose due to failed global crops last year leading to reduced world supply - global stocks are currently at a 30-year low - causing the markets to become volatile and a huge surge in demand for biofuel crops in the USA, he adds.

"It is interesting to note that if the UK achieved the five per cent renewable transport fuels obligation by 2010, over a million hectares of land would need to be utilised to serve this. Rising grain prices have made the economics of the biofuels sector precarious and many of the proposed facilities are yet to be built.

"The biggest impact on cereal farmers could be compulsory set-aside being set at zero per cent However, if only a few of the planned wheat processing plants materialise and use UK grain, this should further boost prices and see part of our exportable surplus of wheat disappear.

"Land prices are rising faster than ever and have hit an all-time high recently, with annual appreciation of 27.3 per cent to June, the fastest rate of growth recorded for the last thirty years. The average value for all types of farmland rose to £3,805 per acre in Q2 2007, up from £2,998 12 months previously.

In Shropshire and the Welsh Borders over 2007 we have seen arable land selling for between £4,000 and £5,000 per acre with pasture land at £3,500 to £4,000 per acre and considerable higher for the amenity land.