15 October 1999

Negative wheat talk overdone

By Amanda Dunn

TALK of poor UK wheat quality resulting from the recent difficult harvest may have been overdone, says the Home-Grown Cereals Authority.

"Grain quality has eclipsed crop size as the main talking point this season," Gerald Mason, HGCAs senior economist, told delegates attending the Marketing into the Millennium Conference held in London recently.

"Our quality survey of about 1000 samples suggests over 90% of milling wheat and 80% of Group 3 samples have Hagbergs above 180. Were not trying to suggest there havent been poor samples, but the numbers suggest those looking for export grade wheat may get a pleasant surprise."

Specific weights averaged 76.9kg/h, Hagbergs 252, and protein content 11.8%, he added. "Farmers should ask themselves whether current milling premiums will be sustained in the light of improved quality expectations."

As far as overall values were concerned, Mr Mason believed that UK wheat prices could equate to world market values as early as next autumn. November 2000 prices on the Paris MATIF exchange were, at £71/t, already close to UK intervention values. However crop failures, or a weaker £, could push UK prices above intervention, he noted. Tony Russell of the Australian Wheat Board gave hints on how UK farmers could cope at these levels.

"Farmers have not had an easy ride over the past 20 years. It has been tough operating without subsidies and competing in global markets, but they have survived."

Diversification into different crops had reduced exposure to cyclical cereal markets. Pulses, fuelled by export demand to India and domestic feed industry, were now a key rotational crop. Canola (oilseed rape), another useful break, was the "glamour crop of the 1990s" which had boosted gross margins, explained Mr Russell.

Better rotation and fertiliser management, zero-till farming, satellite technology and crop modelling had also improved productivity. But many farmers were unable to survive cost pressures, he conceded. "Farm size has continued a long-term trend to reduce overheads by working expensive machinery over larger areas." &#42