Increased prices for winter wheat, combined with a stalling of the oilseed rape price, should put a questionmark over the future of tight winter wheat/oilseed rape rotations, Nick Myers, technical manager for agchem distributors ProCam, told growers at a joint ProCam/NIAB open day.
Decreasing world grain stocks, increasing global consumption and maize production for ethanol, had combined to push wheat prices into three figures, he explained. Current LIFFE wheat prices for November 2007 were £106/t, while November 2008 grain was trading on the futures market at a similar level. “We’re looking at those sorts of prices at least in the short to medium term.”
But a change in tax incentives for German biodiesel production had seen oilseed rape prices dip recently. “It seems to have stalled at about £170/t. That market is not quite as onwards and upwards as the wheat market.”
The two markets were combining to give an increasing gross margin advantage for wheat. First wheat gross margins for 2007/08 could reach £750/ha on average based on current prices, up from £550/ha in 2005/06, he said. Oilseed rape gross margins remained at £340/ha, while second wheats would produce a gross margin of about £600/ha.
“Now wheat has such an advantage, growers should be looking at widening their rotations to include second wheats. It’s going back to a more traditional way of thinking.”
Other crops could also be considered. Gross margins for winter barley had also improved on the back of better prices, particularly for better barley growers. The crop could potentially help rotationally, Mr Myers noted. “There has been some interest in barley, for example, in Yorkshire, where it would provide an earlier entry into oilseed rape.”
Increased prices for pulses were making those crops more competitive with oilseed rape. “Some growers’ thoughts are turning back to pulses. I’m not saying there will be a wholesale switch back, but an element of spring beans in the rotation is a big plus point for blackgrass control.”