October 18, 2007

 

UK expects 9-percent drop in wheat production

 

 

UK's wheat and barley production is expected to be down 9 and 2 percent respectively, compared to the previous year, provisional estimates of the 2007 UK cereals harvest revealed.

 

Wheat production is put at just 13.4 million tonnes and that for barley at 5.1 million tonne.

 

The figures were lower than most previous trade estimates, according to a USDA attache report.

 

The drop has been attributed to the unusual weather conditions experienced by the UK over the summer, which saw flooding in some parts of England and reduced sunshine hours over much of the country.

 

The reduced crop and high cereal prices have put a strong focus on the animal feed sector. Most market commentators are suggesting that the availability, or otherwise, of reasonably priced alternate feedstock will now be a determinate factor for the UK cereal balance this season.

 

On October 11, 2007 the UK Government' Department for Environment, Food & Rural Affairs (Defra) released provisional estimates of the 2007 cereal production harvest.

 

At 19.35 million tonnes, it is 7 percent lower than the 2006 harvest of 20.82 million tonnes. The most notable drop is for wheat, which at 13.36 million tonnes, is 9 percent down on the previous year' crop of 14.74 million tonnes.

 

Defra puts the wheat planted area for the 2007 harvest at 1.819 million hectares, just 1 percent down on the previous season. It is the average yield, at 7.3 tonnes per hectare, 9 percent down on the 8 tonnes per hectare recorded in both 2005 and 2006, that pulls the production down to 13.36 million tonnes.

 

For barley, Defra estimates the winter barley area for the 2007 harvest was 2 percent down on 2006 at 378 million hectares. Like wheat, according to Defra, winter barley yields fell dramatically in 2007 and at 6.2 tonnes per hectare were 8 percent down on the previous season. Together this meant a 10 percent decline in the winter wheat crop to just 2.34 million tonnes.

 

Spring barley was more of a success story. The 3 percent increase in area, to 507 million hectares, and a near traditional yield of 5.5 tonnes per hectare, saw the spring barley harvest rise 7 percent to 2.81 million tonnes.

 

This has redeemed the total barley harvest such that it has fallen just 2 percent on 2006 to 5.15 million tonnes.

 

While some grain traders in the UK had been anticipating the UK wheat crop would be put at around 13.0 to 13.5 million tonnes, others were continuing to work on a range of 13.5 to 14.0 million tonnes.

 

Indeed, while the UK did suffer heavy summer rains and localised flooding, it had previously been thought that the main arable areas had escaped the worst of the damage.

 

If Defra' provisional estimates prove correct, it will be clear that this damage was more widespread than previously thought and that the crop has also suffered from the reduced sunlight hours recorded this summer.

 

The UK Government will release its first set of balances for the 2007/8 marketing year in early November.

 

The market is now concerned on the availability, of reasonably priced alternate feedstock.

 

The tight supply situation might suggest little or no exportable wheat and barley surplus and high cereal prices mean that farmers will be increasingly looking to find alternative feed sources.