Farmer Focus: How high will the wheat price go? 

Since writing a couple of months ago about a career-busting price of over £200/t for wheat just after harvest, I can now report on £260/t for the remaining few loads of milling wheat. Amazing, how did that happen?

The initial reaction was that it’s a shame that it was only the last few loads, but the benefit of hindsight is a wonderful thing.

I have no doubt that there are those of you who are still yet to sell a grain and yielded at least 10t/ha. All I can say is good for you! 

See also: Soil health improves after switch to new drills

About the author

Andrew Blenkiron
Arable Farmer Focus writer
Andrew Blenkiron manages the 4,400ha Euston Estate, south of Thetford. Principal farm enterprises are combinable and root crops, including sugar beet. In addition the estate supports let land, sheep, outdoor pigs, poultry, suckler cows, horses and stewardship.
Read more articles by Andrew Blenkiron

The question is, how high can the price go?  If we got to £260/t, why not £300/t?  Who is paying this and indeed, will the consumer notice?

Much more importantly from my perspective is how many years in the future will it get anywhere near this price again?

After all, the world’s population is still growing at an alarming rate and everyone needs to eat.

It would be great to think that the price is sustainable at this level and that as arable farmers our prayers have all been answered. The market has taken the slack and will recover what the BPS won’t.

Then I remember that there are a few animals knocking about that require a bit of feed – where is the ability to recover the extra cost of production from their markets?

We then need to look at the other side of the coin, our input costs. The increase in nitrogen fertiliser alone has added £40/t to wheat production costs.

Nitrogen is just one of the inputs. Let’s not mention labour, fuel, machinery and chemicals. Before we know where we are, we will be making the same margin, but with lots more money tied up.

That then increases the risk, for which we should be able to justify an increased reward.

All of these issues and those based around legislation and the future of ELMs formed the basis for some great discussion at our local NFU branch AGM last week. It is great to be able to get together and debate the issues of the day again.

Futures contracts: farmer views wanted

Do you use futures and options markets to help you manage risk? Or are you interested to learn more? Farmers Weekly is keen to find out the extent to which UK farmers use these markets. Complete our survey here.

Take the survey

Futures markets and commodity risk management online course:

  • Risk management strategies for a more predictable financial performance
  • Educated conversations when collaborating with your advisors
  • Negotiate better prices with your grain merchants

View course

Using contractors saves you time and money. Now you can book, track and pay all in one place. Register for early access today.

Find out more