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The UK wheat crop totaled 15.3m tonnes this harvest, 3% more than last year, according to final results from Defra’s national survey published today (22 December).

Wheat production was up due to a 2% increase in the sown area to 2m ha, combined with a 1% increase in the average yield, to 7.7t/ha. The highest yields (8.1t/ha) were in the North East, Yorkshire and the Humber, while the lowest yield was in the North West and Merseyside at 6.5t/ha.

Barly production was up 5% in 2011, to 5.5m tonnes, as a 13% increase in the spring barley area more than compensated for a decline in winter barley and a small reduction in overall yields.

It was a record year for oilseed rape though, as yields were up by 13% to an average of 3.9t/ha and area was 10% higher than 2010. This led to total UK production of 2.8m tonnes, some 24% more than last year.

United Oilseeds says its turnover has rocketed by 47.1% in the past year on the back of higher commodity prices and membership growth, Nick Fone writes.

The company saw approximately £148m pass across its books this year, up from £50m just five years ago.

That’s reflected in profit too, which stood at £819,000 for the year-ended 30 June 2011, 6.4% more than last year. Good news for United Oilseeds’ trading members who will receive a bigger than usual payout based on that performance - last year that sum totalled £325,000.

The company estimates the area of oilseed rape planted this autumn is up by 8.3% on last year, taking the UK total to 763,000ha (1.89m acres). Its 2011 harvest survey shows rape yields averaged 3.99t/ha (1.61t/acre) this year.

Rising costs are set to push the average cost of production for feed wheat up to £130/t for 2012, according to the latest forecast from Agro Business Consultants.

The November edition of its costing book shows that costs including rent and finance charge are up about £6/t on 2011, although with a predicted selling price of £140/t, feed wheat is still profitable without support.

Oilseed rape was also likely to give a decent margin. Costs were set to rise by £13/t to £320/t, but this was still £25 below the budgeted selling price.

But margins for feed winter barley were less promising as costs were predicted to total £153/t, over £20/t above the expected selling price.

There was also inflationary pressure in the livestock sector. For example, production costs for a year-round calving dairy herd were put at 25.6p/litre, up by just over a penny from the current year.

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In what the company describes as a challenging and surprising marketing season, Gleadell’s harvest oilseed rape pool has returned £352.50/tonne ex-farm to growers after commission and before bonuses.

Initially, little and often was sold to put a base into its pool sales. Once it became apparent that the crop had defied all expectations, the balance of the pool was sold into the developing export market.

Current ex-farm prices are at £355-£365/t ex farm, depending on location, with new crop at £330-£340/t ex farm. 

“There is some concern over rapeseed plantings in Germany, Denmark, Romania and Bulgaria - and this uncertainty should support new crop UK rapeseed for the time being,” said trading manager Jonathan Lane. Underlying continental demand would support rapeseed throughout the season, but prices may be vulnerable in the short term.

Oilseed rape could be a more profitable crop than wheat next harvest, according to the latest edition of the industry bible, The John Nix Farm Management Pocketbook.

The latest (42nd) edition has just been published and suggests that in terms of gross margin, osr could outstrip wheat as the highest broad-acre combinable crop for the first time in 20 years.

There’s some welcome news for livestock farmers too, as the new edition says beef and sheep gross margins also offer “greater opportunities for profitability than for many years” on the back of price increases.

The outlook for poultry is less optimistic though, as the most intensively farmed caged egg chickens are budgeted a negative gross margin per bird, even before overheads are included.

The amount of wheat, barley and oilseed rape in the ground for this harvest were all above last year, according to provisional results from Defra’s June 2011 Census.

It put the English wheat area at 1.82m ha, 1.6% above 2010, with the largest increase in the Yorkshire and Humber region. The total barley area was up 4% to 607,000ha, driven by a 17% increase in spring cropping, which more than offset a 7% fall in winter barley.

The oilseed rape area was 8% higher than 2010 at 650,000ha, the largest area ever. Both spring and winter-sown areas increased, by 37% and 8% respectively.

Uncropped land was put at 136,000ha, 9% below last year.

Oilseed rape exports are leaving the UK in an Armada of boats heading for Germany, France and Poland, among other EU destinations. Record rape yields here are helping to make up for an anticipated overall shortfall in production compared with likely demand across the EU.

Spot prices were £365 to £368/t ex farm as Farmers Weekly went to press on Wednesday (3 August). Oilseed rape oil has been trading at a significant premium to soya oil for several months and the outlook is firm, say traders. 

 

FW has been hearing of some impressive rapeseed yields this season, despite the Spring's drought. One farming contributor in the office this week reports nearly 5t/ha in southern Oxfordshire (although he was less keen to talk about his barley).  But what remains to be seen is how much we have as a nation to export, and how this gross tonnage will influence prices. There are several ways the industry collects this information and the NFU is urging members in England and Wales to complete its harvest survey.
Chief arable adviser Guy Gagen said: “Historically, the harvest survey has proven to be a reliable estimate and provides the most accurate early forecast for UK crop yields and production levels. To ensure it is comprehensive it is vital that as many farmers as possible take part. The data gathered supports the results of DEFRA’s own survey later in the autumn and fills an important gap between harvest and when official estimates are available."

 

The HGCA has published an interesting prediction of arable incomes this season, showing the impact of higher grain prices, but also the potential losses if there is a big drop in yields.

Its hypothetical 100ha model estimates income for the 2011/12 season will be £50,738/100ha, well up from the £39,088/100ha in 2010/11. The prediction is based on an indicative ex-farm feed wheat price of £166/t, barley at £156/t and oilseed rape at £380/t. Average wheat yield is put at 8.07t/ha.

But the HGCA acknowledges the recent dry weather is causing concern over crop condition and suggests a 20% yield reduction would knock almost £23k off the income estimate. If ever there was a year for adopting risk management when marketing grain, this is surely it.

Arable farmers selling grain forward have been urged not to over-commit on contracted tonnage for this harvest.

The driest spring for fifty years in some parts of the UK has prompted fears that yields could be reduced and this must be taken into account when committing grain forward through grain pools or physical contracts, NFU chief arable adviser Guy Gagen said.

Lessons should be learned from last year when there was a similar dry spell during the spring and summer, which had an effect on yields, he said.

“Marketing crops forward in a period of volatility can undoubtedly be a good way to help mitigate risk from downward price movements. With 2011 forward prices much higher than anticipated, many arable farmers have already secured tonnage for the 2011 harvest that enable them to improve chances of locking in a profit.

“However…when a deal has been done to secure prices, it is important not to over-commit crop, particularly in a rising market.

Grain traders advise that when a shortfall against committed or contracted tonnage is anticipated, discussing options as early as possible makes it easier to work out a mutually acceptable deal between the parties.

“Waiting until movement to discuss a shortfall on tonnage all too often results in the kind of solution that our members are very unhappy with,” Mr Gagen said.

There have already been a number of reports of slow and patchy emergence of spring crops and signs of water stress developing for oilseed rape and some cereal crops, he noted.