Grain plantings down this year
CEREAL plantings for 1998/99 were lower than expected, according to the first official ministry figures released this week.
The June census shows that wheat area in England fell by 8% on the year to 1.76m ha (4.35m acres), based on returns from about 87,000 farms.
If other regions follow the trend, total UK cereal area may reach only 1.86m ha (4.59m acres), says Gerald Mason of the Home-Grown Cereals Authority.
"That is about 65,000ha (1.6m acres) less than the HGCA final figure, close on 500,000t. I suspect most of the trade will revise their wheat crop estimates down to 15-15.4m tonnes."
With quality rather than quantity remaining the key factor, the news had little effect on prices. But the Bank of Englands surprise decision to put up interest rates to 5.25% on Wednesday did.
Sterling rallied, putting immediate pressure on commodity markets. With the exchange rate against the euro climbing to 1.53 Wednesday afternoon (Sept 8), intervention values dropped by over £1, to £78.50/t for November.
Barley prices slipped to £73/t ex-farm. And with imports becoming cheaper and exports more expensive, ex-farm wheat values fell to about £68/t.
Grain traders were deeply critical of the interest rate move, intended to quell the over-heated housing market. "There is no point in the government setting up an emergency committee for agriculture, then allowing this to happen," said David Balderson of Viking Cereals. *