A few weeks ago, the NFU warned the UK wheat harvest could be down by as much as 30% on last year. But despite this, wheat prices are falling and poultry and pig farmers are switching back to using wheat in their feed.
The wet and cold spring battered the UK crop and set the scene for a second successive year of below-average production. But the global picture is much more positive, with good plantings in the US, Russia much improved on last year and Continental Europe looking OK.
The upbeat global forecasts have brought wheat prices in this country crashing down. Since the start of the year, the UK bread wheat price has fallen 20% to £190/tonne, and the feed wheat price has crashed 25% to about £160/tonne [Mintec]. Supplies are also plentiful - the UK has imported a lot of wheat to make up for the shortfall in domestic production last year.
The upshot for farmers is that the case for using more wheat - which is nutritionally better than feed alternatives such as barley - is much improved.
“If wheat becomes more expensive relative to barley, as it did last year, people switch. Now people will be switching back the other way,” said Stephen Howarth, market specialist manager at Eblex.
The falling price of wheat will benefit pig and poultry farmers in particular, but is also good news for sheep and beef farmers. Although they normally use much less grain than poultry and pig producers, they have had to use more this year because bad weather in the UK has delayed the first silage.
Falling wheat prices will also come as a relief for bakers, who had to contend with record price highs and a poor-quality UK harvest last year. Signs are that the quality of this year’s crop should be better. “My gut feeling is that quality will be OK but quantity could be a challenge,” said Simon Staddon, MD of Nicholas and Harris.