Scope for group 2 wheats
Buyers want better quality
wheats. But how can
growers make the most of
that demand? That was the
question a special seminar
organised by breeder PBI
Cambridge set out to answer.
Several key points emerged,
as Charles Abel reports
MARKET share has already shifted in favour of better quality wheats and looks set to continue doing so.
But matching variety to farm and potential markets is increasingly important.
Quality varieties from nabim groups 1 and 2 took a 10% market share each in 1996, now they have 15% each. "At the same time hard feeds have dropped from 50% to 30%. It is a good trend, it ties in with the market splits, 37% feed, 36% human consumption and 25% export," NIAB cereals expert, Richard Fenwick, noted. Richard Whitlock for merchant Banks of Sandy had no doubt a move into more group two wheat would pay this autumn. "If you have grown it well before there is an increasing opportunity, plus the comfort of an intervention backstop and you still have the feed opportunity." European exports offer particular promise. "We had a fortuitous opportunity last year after the poor north European harvest and managed to get a lot of group two wheats out there. That has given us credibility and opportunity which we must build on."
Rachel Walker for British Cereal Exports confirmed the group two export uplift. "It still depends on circumstances, but it could be worth a look." Assured produce could be particularly attractive, she added. "Italian millers are looking at food safety for more and together with varietal segregation this is something we can really exploit." Further movement into the quality sector could be worthwhile, agreed Mr Fenwick. But check variety characters first, he stressed. NIAB data shows big variations in their ability to meet quality criteria.
On Hagberg, for example, Abbot, Soissons, Malacca, Spark and Hereward all top 250 more than 98% of the time. But Shamrock, Charger and Rialto only managed that 65% of the time.
Similarly, for specific weight, Soissons, Spark, Hereward and Shamrock meet the 76kg/hl criteria over 80% of the time. But Rialto manages it with just 70-75% of samples, Charger with 62% and Malacca 56%.
For protein content the range is wider still. "The 11% target is the biggest stumbling block for quality wheats," Mr Fenwick noted. Soissons and Hereward top it more than 7 times out of 10, Shamrock and Spark more than 6 times, Abbot and Rialto 50% of the time, Charger 34% and Malacca just 29%.
"There is scope to do more quality wheats, the profitability is there. But the risks need to be overcome and correct variety choice and husbandry can help achieve that."
Buyers specific needs
ECHOING the need for careful segregation of grain lots and careful targeting of market needs, Laurie Pearson of miller Heygates highlighted the very different flour qualities needed for different end uses.
Weak, soft flour for cake mixes is very different from the strong, hard flour needed for bagels and burger buns, of which 2bn a year are consumed in the UK.
"It is the character of the protein of the variety that is even more important than the nabim group. We need different qualities of wheat for different uses, so know your market before choosing a variety," Mr Pearson advised. Single, named varieties of a consistent quality is also required to produce flour of a consistent quality. "Grain from the US and Canada comes in on spec year on year on year. If anything it will be well inside the spec. And that is the consistency we want."
ACCS moving farms away from segregation
GRAIN assurance is driving the industry away from the segregated storage buyers want to keep varieties and batches separate, noted seed producer Mark Wells of Burbage Farms, Hinckley, Leics.
Investing more in storage than harvesting equipment could be an answer, it was suggested. ACCS had pushed farmers towards larger stores both through the cost of adapting smaller stores and through the rules on temporary storage and non-specialist buildings, he said.
"As seed growers it is vital that we keep batches separate. But ACCS is creating a bulk-store focus. It is inevitable that some smaller parcels will get bulked up, resulting in a feed market rather than something that could have been more profitable."
He felt farm stores could be given more flexibility. "With the best will no processing plant can be as clean as a cleaned, separate farm building."
Richard Whitlock for Banks Agriculture said investing in better storage and drying facilities could help. "Starting harvest at 18% can do a lot to maintain quality and improve harvest throughput."
Combine settings also need more attention, he said. "Broken grains can be more of a problem than shrivelled ones, causing rejections at mills. Resetting the combine between fields and as moisture contents vary will help reduce rejections."
Do quality premiums stack up?
POOR premiums which too often fail to cover the yield shortfall of quality varieties are a constant criticism, admitted NIABs Richard Fenwick.
But the figures suggest that farmers should profit in the long run.
HGCA figures show that the premium for group 1 varieties over group 3s ranged from £5-£26/t over the past 10 years, averaging £15/t. "With an average 7% yield shortfall compared with group four feed varieties I think that is enough of a premium to grow group 1 wheats."
NIAB data shows a typical gross margin of £700/ha for top feeder Savannah at £75/t. Hereward with no premium would be £100/ha worse off. But an average premium of £11/t would match the GM for Savannah.
"At the 10- year average of £15/t it is well ahead," said Mr Fenwick.
Higher yielding Malacca and Shamrock would only need a £7/t premium, while group two Rialto needs a £3/t premium, just half the average group two premium over the past 10 years, he noted.
Dont ignore overheads when planning budget
GROWING quality crops involves more risk than a simple gross margin analysis suggests, warned Cambs farmer Mark Gilbert.
Extra nitrogen, fungicide and more costly seed are just part of the equation. Overhead costs must be considered, too, stressed Mr Gilbert, who farms 728ha (1800 acres) at Littleport, Cambs. Extra N and extra fungicides demand two more passes through the crop, which have a cost. Combining, drying and marketing costs are also higher. "Then there is the management cost. It is tricky to calculate, but it is more than just a few extra packs of Nurofen.
"We struggle to make it work for less than £15/t. That is why we grow a third group 1 Hereward, a third group 2 Charger and a third group three Consort. And I think that is what we will continue with."
Mr Gilbert also pointed out that UK seed and chemical costs were higher than in Europe and farm assurance added a further 50p/t.
Assurance still required
ASSURANCE must be pursued, urged Richard Whitlock of Banks Agriculture.
"If a buyer wants an assurance that grain is not being treated with the contempt of a heap of gravel, that needs to be proven through independent verification, rather than the farmer becoming an expert in verification himself." From this harvest growers will start to see real benefits from assurance, claimed Robin Pirie of Assured Combinable Crops Scheme verifier, Checkmate.
"It will start giving a markets advantage, with some buyers buying assured only and others offering early movement and early payment."
Export opportunities are worth pursuing
GRAIN producers need to be as competitive as they can in as many ways as they can as they move further into world market conditions.
Quality wheat which has been stored separately and supplied to a detailed criteria is winning growing praise from overseas buyers, stressed British Cereal Exports manager Rachel Walker.
"Do not view overseas markets as a market for surplus grain, treat them as a market in their own right. Those buyers have the right to demand just the same quality and service as UK buyers," she said.
"We are trying to help overseas buyers specify what they really want and where they do and we supply it they are really impressed with the results. The message now is for farmers to work at storage, separation and quality, so traders have grain to draw from to meet the criteria of the buyers exactly. It can give us a real edge in the export market." *