March 14, 2008

Large UK wheat crop seen to ease feed prices

As UK farmers are growing more wheat crop this year, analysts are expecting a feed grain supply glut that could relax prices for the livestock sector.

Farm ministry figures on Thursday showed the wheat area in England had risen 10.4 percent, taking cue on high global prices.

Production is expected to rise by 20 to 25 percent if yields reach at least average levels.

Susan Twining of crop consultants ADAS said that yields could reach 8.0 tonnes per hectare, against the current five-year average of 7.8 tonnes and last year.

UK's livestock sector has been struggling with record high grain markets, driving up meat prices and adding to the overall inflationary pressure coming from food.

Analysts said the quality of this year's wheat crop may open new export markets for the anticipated supply surplus.

Simon Ingle of Britain's largest farmers cooperative Grainfarmers, said that there had been a drop in the sowings of varieties more likely to produce milling quality supplies with many farmers opting for high yielding wheat that generally only attains feed standard.

Last year, the European Commission required farmers to leave some land fallow, known as set-aside, in a bid to increase grain supply at a time of shrinking global supplies.