As hopes of a weather-induced price rally fade on the back of improving crop prospects and plentiful stocks, it is time to consider how best growers can exploit the market and the opportunities it holds.
Conditions in France have improved after a bumpy start and rain across northern France and Germany and into the UK could go a long way to ensuring yields come in closer to initial forecasts than was the likelihood just a few weeks ago.
Across eastern Europe, conditions are far from being a concern. It’s true that conditions in Ukraine aren’t as good as last year, but across the Black Sea region supplies are forecast to be enough to support exports.
World stocks too are plentiful at about 35% of consumption, a level not seen since 2001 and almost 15% more than in 2007 when prices reached record highs. Much of these reserves are held in China and are unlikely to come on to the world market in a time of shortage, but nonetheless, markets seem unconcerned by this issue.
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In a world awash with wheat and volatile currencies affecting our export appeal, it may wise to consider what can the UK produce that sets it apart from others?
In this situation, there will have to be a greater focus on meeting the needs of the domestic market and on producing wheat for which there is strong demand and which the UK is uniquely placed to produce. This is soft wheat, specifically biscuit wheat.
The area of quality soft wheats, i.e. Group 3, has been in decline for many years due in a large part to the higher yield potential of hard feeds and more recently bread-making varieties.
This is no longer the case. The UK yield of KWS Barrel, for example, is on a par with that of KWS Siskin, KWS Santiago and Reflection. In the north, its performance is even better.
Demand too is firm. The UK produces about 1.5 million tonnes of Group 3 wheat each year against a demand of about 1.1 million tonnes. Not all of that produced meets specification and we export on average 75,000 tonnes though there is scope for more if suitable supplies were available.
Unlike milling wheats there are no easily accessed alternatives save soft red wheat from the United States of America and Canada. With attractive Group 3 premiums for next season and yield potential at feed parity, biscuit wheats are a sensible means of spreading the market risk in any farm business.
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