By The Gleaner
Another week passes by with calm, mild weather and the forecast looks like more of the same to come.
Defra have revised the UK 2016 wheat production down to 14.38m tonnes compared to 16.44m tonnes in 2015 and in Scotland, total wheat production was down 9% to 926,000 tonnes and average yield of 8.4t/ha.
For 2017 the UK wheat area is forecast to fall slightly by 1% to 1.8m ha which includes spring wheat. The forecast wheat area for 2017 equates to an area 4% below the past five-year average but the reduction in the size of the 2016 crop compared to last year, means that this season will be more of a balancing act between supply, demand and trade.
Considering 2016 production alone against forecast demand, this could be the third season in the last five that domestic consumption would outweigh the size of the year’s crop. At 2.8m tonnes, opening stocks at the beginning of 2016-17 are estimated at the highest level on records going back to 1991-92 and this season’s estimated opening stocks have gone some way in cushioning the UK market from the approximate 2m tonnes drop in production. The extent of opening stocks has allowed the strength of the UK wheat export campaign seen at the end of 2015-16 to continue into 2016-17 and at least 1m tonnes will have been exported by Christmas. As a result, it is expected that the UK may have to import feed grains towards the end of the season to meet domestic demand. This is because the quality of the UK milling wheat crop this year suggests that imported wheat will be used at minimum levels by flour millers this season and 2016-17 imports of both maize and wheat are forecast higher year-on-year than in 2015-16.
Traditionally, the UK is a net exporter of wheat, with records showing greater exports than imports in 19 of the last 22 seasons. In recent years however, excluding 2014-15 and 2015-16, we have seen net imports as a result of smaller than usual domestic crop sizes.
The growth in domestic consumption is much more pronounced than that for UK wheat output. Growth in the demand for UK wheat is increasing at a steady rate, whereas UK production is not in line to keep up with demand. Domestic demand is increasing at a rate of 1.5% per annum, averaged over the last 25 years, compared to growth of 1.2% per annum for production. If the wheat area remained at the 2016 level we would need to achieve an annual growth in yields of 2% to maintain production growth and over the last 25 years yield growth has only been 0.7% so UK wheat supply and demand is on a knife edge.
UK barley exports in the season up to October have been at their lowest level in four years due to almost no exports to non-EU countries. Barley is also struggling to find GB compound feed demand and UK barley exports up to the end of October and with a third of the season gone total 430,000 tonnes compared to 507,000 tonnes at the same time last year. UK average ex-farm feed barley spot prices traded over £20.00 lower than feed wheat in late October, yet wheat still continued to be more successful in finding both export and domestic feed demand. Feed barley is trading at a particularly large discount to wheat in the North-East where feed wheat prices are being supported by the two bioethanol plants in the region resulting in a premium for wheat £5.00 higher than in other areas of the UK.
The 2017 UK winter barley area is expected to decline by around 10%, whilst the area of spring barley is anticipated to continue to increase, with the 2017 area to be almost 17% higher at 799,000ha and apart from 2013 when poor autumn conditions in 2012 meant more spring sowing, this would be the highest area of spring barley on records going back to1997. However, if the price spread between barley and wheat continues, there could be a switch of some of this area into more spring wheat. A lot of this extra spring barley will be grown in England where they are affected by blackgrass and cutting back on winter sown crops.
In Scotland, total production of spring barley in 2016, mainly aimed at the malting trade, was back by 15% to 1.30m tonnes due to a 7% cut in planting and a 9% fall in yield giving the smallest harvest since 1997 in Scotland with yields averaging 5.4t/ha and winter barley was back by 9% to 329,000 tonnes.
Barley seed availability appears to be in short supply and seed merchants are already suggesting that seed for certain varieties of spring barley prices are approaching £400.00 per tonne.
The area of oats in the UK over the past 4 years has been above historical averages but the area for 2017 is projected to reduce by 8% to 130,000ha. In Scotland the oat area is the only cereal are to increase last year with the crop topping 200,000 tonnes for the first time. There was a 22% increase in planted area and a 9% increase in yield resulting in overall oat production up almost a third on the year.
The oilseed rape area for 2017 in the UK is forecast down by 4% which would see a rape area of 557,000ha and would be the lowest since 2004 and the fifth successive year that the area has fallen. This due in part to flea beetle issues already well documented and in Scotland last harvest, oilseed rape had a poor year with yields averaging around 3.3 t/ha and together with the lower sown area resulted in the lowest production since records began in 1992 at 102,000 ha.
Pulses in the UK have seen a significant increase in area in 2015 and 2016, but for 2017 are projected to fall by 6% down to 216,000ha and would be similar to the area seen in 2015 and remains well above the five year average.