Record wheat harvest may undermine prices further

feeling the pressure: Some growers could see no profit from the cereal harvest for up to three years.                Picture: Michiko Smith/Rossparry.co.uk
feeling the pressure: Some growers could see no profit from the cereal harvest for up to three years. Picture: Michiko Smith/Rossparry.co.uk
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A NEW record wheat yield will be reached this year across British farms, new survey results suggest, heightening fears of more price drops that have already left many arable farmers receiving less for their crops than the costs of production.

The survey results, produced by the National Farmers’ Union, show a six per cent wheat yield rise year-on-year, from 8.6 to 9.1 tonnes per hectare. Even with a reported decrease in area planted this year, UK total wheat production is estimated at 16.68 million tonnes for 2015, beating last year’s figure of 16.61m tonnes.

But Mike Hambly, NFU combinable crops board chairman, expressed concerns, saying: “In a global context we have seen a sequence of good harvests and grain stocks are currently comfortable.

“Cereal prices are global and like most commodities are currently low. For example, we’ve already seen prices taking a 30 per cent tumble over the past two years and costs of production staying put. Many growers are facing the prospect that grain prices will fail to cover the cost of production.

“For some this will be the second year they have endured such a situation and with forward prices for next harvest also below cost of production some could see no profit from those crops for three consecutive seasons.”

Richard Bramley, vice chairman of the NFU’s regional crops board, grows milling wheat at his farm in Kelfield near York and has averaged five tonnes per acre this year - up a tonne per acre on an average year.

Prices for milling wheat are averaging at around £130 per tonne, he said, compared to around £110 per tonne for field wheat.

“The prices are a concern for most growers,” he said. “If it wasn’t for the yield we had, it would be looking particularly poor but that extra tonne of yield has taken a bit of pressure off.”

Mr Hambly wants measures to improve the sector’s competitiveness and called upon the Department for Transport (DfT) to bring its UK cap on crops used for biofuels back in line with EU targets.

Mr Bramley backed that call, saying the opening up of the biofuels market could help counter the strain caused by low prices.

“That sector means a lot to this region and potentially it would remove the surplus production from the UK market,” Mr Bramley said.

The £250m Ensus bioethanol plant on Teesside was launched in 2010 on the basis that a push to reduce carbon emissions from road transport would drive demand for bioenthanol, but it has been beset by shutdowns, with the industry left disappointed by a government target that 4.75 per cent of transport fuel must come from a renewable source.

A DfT spokesman said: “Advanced biofuels have a clear role to play in making transport greener. The government recently awarded £25million in grants for the production of biofuels in the UK that will create 5,000 jobs and add up to £130m to the economy.

“We believe the EU agreement made in July will allow the UK to set the right limit for crop-based fuels. We will continue to work with the farming industry which we know makes a vital contribution to sustainable fuel production.”

Fruits of strong harvest season

The NFU’s harvest survey results show that despite mixed growing conditions across the UK over the summer, there are expected to be major improvements in average yields for the year.

Results show that there will be an estimated winter barley yield of 7.5 tonnes per hectare, a four per cent increase on last year and an extra tonne ahead of the ten-year average.

The estimated spring barley yield is 5.9 tonnes/hectare which is similar to last year but higher than the ten-year average of 5.4 tonnes/hectare.

And, the oilseed rape yield is predicted to reach 3.8 tonnes/hectare, exceeding last year’s 3.6 tonnes/hectare and the ten-year average of 3.4 tonnes/hectare.