16 August 2002


Needless to say,

harvest in the eastern

regions reflects the

national picture…lots

of standstills and

lots of rain

It will surprise no one that the wet weather with which I ended last weeks column has continued. Similar conditions applied across Britain, although the isolated nature of some storms was remarkable. Travelling through Essex I saw a combine cutting winter wheat. There was a cloud of black dust coming out the back, which must mean fusarium, septoria, mildew, or whatever, and may bode ill for most wheats, as yet untouched. Three miles further north, the road, and the crops beside it, were saturated.

We had a similar experience on this farm, where we have managed to harvest a disappointing 18. 21ha (45 acres) of winter barley in the seven days since I wrote last weeks piece. We were finishing combining one field in dry conditions while we could see clearly the one next door, to which we had intended moving, was getting a soaking. Needless to say, the general rain that followed put a stop to all thoughts of harvesting for days.

As I write, we still have 8ha (20 acres) of winter barley to bring in and each drop of rain pushes the ears closer to the ground, destroying what malting quality the grain may once have had. But because of the weather market this created we did manage to sell and move the few loads gathered before the weather broke. And the price? Wait for it! An incredibly exciting £60/t was the best bid. Then deductions for screenings of £3/t were imposed on one load.

Over a weighbridge and therefore accurate, the crop yielded about 7.41t/ha (3t/acre). Comparatively speaking, I am assured, we did rather well. It is not yet entirely clear what yields we have achieved from the weathered samples brought in since, or what we might get for it, or the rest, still out in the field.

Meanwhile, if we could only get at them, many of the wheats are fit to combine. Traditionally in this area we dont reckon to start wheat until the third week in August. And although I am pleased at the possibility of being able to bring that forward, I am worried, if wet humid weather persists, that the ripe grains will sprout in the ear. The good news is that, in spite of heavy rain, our wheats are all still standing. I admit I am clutching at short straws but its about the only thing I can do at the moment.

For the price of wheat is, if anything, more depressing than that for barley. We have known for months there was likely to be a big surplus this year, forcing values down. Increased drillings last autumn saw to that and the storms may have destroyed the quality of milling varieties adding still more downward price pressure. But I was also under the impression that UK prices were supposed to be getting closer to those on world markets with ours shadowing the biggest of them all in the USA.

As you may be aware there has been a serious and widespread drought since the spring across vast areas of the Mid West. Yield prospects for US wheat, and those of most other combinable crops, come to that, have been slipping since and prices have risen sharply. Spot values in Kansas, the centre of the wheat belt, were $4.20/bushel a few days ago, almost $1 higher than they were the same time last year. There have been similar increases elsewhere. Converted to sterling $4.20/bushel equates to a few cents short of £100/t.

Interestingly that is almost exactly the price guaranteed to US farmers for wheat under the new Farm Bill, so the USDA may not have to pay out as much subsidy as first calculated. If it is true to recent form, however, America will compensate farmers for drought-affected crops under the heading of disaster aid – permissible under the WTO. But if American farmers can get £100 from the market, why must we accept £55 or less?

The answer lies in the Baltic. Former Soviet Union countries that ship out of Black Sea ports are so keen to earn negotiable currency that they are prepared to sell wheat to EU member states at under £70/t FOB. That means it leaves the FSU port at about £40-45/t; the exporter pays a levy of £15/t to get it into the EU; he also pays freight charges of another £10/t, allowing delivery to be made to, say, Spain at the agreed price.

The surplus of UK wheat means several million tonnes must be exported over the next 12 months. According to my friendly merchant, to shift it, UK farmers may have to take prices similar to those being accepted at Black Sea ports. I hope hes not talking the market down. He promised he was not. Indeed, he went on to remind me of floods across much of Europe, including the Baltic, that were spoiling crops, and of a drought in Australia that could cut production by 5m tonnes. All of which should stimulate the market. Except for that Black Sea stuff. And the deal to accept it into the EU under existing terms is fixed until January.

To cheer us up we desperately need some better weather.

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