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Poor harvest but strong market for wheat farmers

With wheat harvests hovering around the five-year average of eight tonnes per hectare, the verdict on this year’s wheat harvest is ‘nothing to write home about’.

The average yields are not solely the preserve of the UK. In France, the milling quality of the wheat was diminished due to the bad weather suffered during the growing period. Likewise, German milling wheat has also suffered and is of poor quality.

Further afield, Canada’s wheat crop was hit by drought conditions and so its exportable figures are lower than usual, while in the USA wheat stocks are reported to be eight per cent lower than the previous year.

All of which is better news for UK farmers as the tight market has led to milling premium of £35, a vast improvement on recent years where the premium has not edged over £20/ton.

Millers in the UK traditionally buy a minimum of 300,000 tonnes of high quality Canadian wheat, so with this in short supply, they will be looking to buy domestically produced wheat before they start sourcing wheat from the US, Kazakhstan or Australia. Wheat growers can take advantage of this demand, although Rupert Somerscales, a senior analyst with ODA warns against farmers expecting the prices to go even higher: “Milling premiums could increase a little further in the weeks and months ahead, but growers with decent samples should not bank on that and levels can plummet once the short squeeze passes.

‘Having a keen eye on the market and receiving some expert advice on its direction has never been so important in making your selling decisions, with a multitude of issues combining to make a very complicated, international picture.’

Pic credit: Photo by Jessie Jess on Unsplash