The AHDB EBS figures indicate 1,217 thousand hectares (KHa) of wheat had been planted by 14 February. The total wheat area forecast to be planted is 1,504KHa, down 17% from 2019 statistics. A sizeable shift into spring wheat varieties has been seen, with intended spring drilling figures doubled from earlier estimations.
The UK wheat crop is expected to decline by almost a third from last year. A mid-range estimate puts production at 10.74 million tonnes (Mt), the lowest wheat figure in over 20 years. A distinct decline in winter wheat plantings this year is seen, the continued above-average monthly rainfall from October onwards has prevented many growers from even accessing fields. This rainfall has continued throughout the opening months of this calendar year, creating further problems for those who intended to plant more winter wheat.
Whatever the production figure becomes, it will face a large carryover, with new-crop futures currently incentivising this. At the least, an additional 1.0Mt+ of old-crop wheat and barley could be available at the start of the new season. Disruptions from Brexit uncertainty and a stronger sterling earlier this season have seen export volumes fall behind the pace required to move the surplus from this season.
On paper, domestic wheat prices should see support from a low production figure, though realistically, prices in the longer term will sit at import-parity levels because of the presence of large European and Black Sea grain supplies on markets. It is only the UK and France to an extent that have had disruptions to winter planting, meaning demand is likely to be met with imports.
Russia, Ukraine and other Black Sea producers saw a milder winter with almost zero frost-kill damage to their winter crops. Though soil moisture levels are on the drier side, it remains likely that export levels from these countries will be strong throughout the upcoming season.
AHDB estimates for barley production indicate a well-supplied market. With winter acreages not getting planted, spring variety planting has proven to be a popular option amongst growers. Spring barley plantings, if fully met, would be at a 47% increase on last year at 1,047KHa. As such, a mid-range estimate for total barley production is 6.4Mt, with a best case scenario of 8.5Mt. With an approaching spring barley planting window, it is likely that barley production will sit high in this range.
Winter barley area has seen a considerable cut this year, with acreages estimated down 23% on last year. AHDB estimate the winter barley area at 347KHa. The overall condition of the winter barley crop is an important focus, as much of the area will aim for malting grade specifications. Unexpected barley shortages for the malting, distilling and brewing sectors will likely be recovered with the use of imported supply.
Feed markets are a likely destination for much of the domestic barley supply. However, the presence of imported maize for feed markets will pressure domestic barley prices. Black Sea origin maize has become an important feature in feed markets given its close proximity to Europe.
With Black Sea maize prices tracking lower than European equivalents, and a large exportable supply available, maize will almost certainly act as an anchor on domestic feed prices. Ukraine’s maize production was estimated at 35Mt in 2018/19, of which 30Mt was of exportable surplus. The UK imported over 3Mt of maize last season, of which 931 kilotonnes (Kt) were of Ukrainian origin.
Production figures for the UK rapeseed crop paint a worrying picture for its future. According to the EBS data, the winter rapeseed crop planted area was almost a third lower than last year, as at 14 February. Figures suggest that over winter 38KHa of rapeseed was lost, most likely as a result of pest damage or flooded fields.
AHDB estimates for oilseed rape production have a best case scenario figure of 1.26Mt, assuming no further crop losses and a five-year average yield of 3.5t/ha is achieved. This figure is still a year on year decline of 489Kt, signalling the decline in popularity of the crop and a greater reliance on imports. A mid-range estimate is a figure of 1.07Mt, with a worst-case scenario at around 895Kt. Further cabbage stem flea beetle damage is likely to be seen over the next few months and into harvest as the larvae hatch and feed on the crop throughout March and April.
Throughout the early parts of the season, a large EU import demand for rapeseed was met from Ukrainian supply. To date, over 3Mt of Ukrainian rapeseed has been imported into the EU. This is a likely norm now for rapeseed markets going forward. The UK also saw a greater need for imports this season due to below average production figures.
The Ukrainian rapeseed crop is reportedly in good condition, without any risk from frost damage. As such, domestic rapeseed prices are likely to price to the European equivalent and see minor support from poor domestic production figures.
The persistent rainfall also badly affected the potato harvest, creating difficulties for machinery to access fields and lift the crop. Saturated fields in some regions meant some parts of potato fields were sat underwater, affecting the quality of the crop. Conversations with growers indicate northern regions of England have large tonnages still in fields as of March.
The quality of supplies still in the ground can be questioned, fry quality issues have been reported in later lifted samples. For chipping markets in particular, this could create supply tightness later in the season as availability of top quality supplies lessen. Discussions with merchants indicate it is already difficult to source top quality chipping material for the right price.
Source: AHDB, Defra, HMRC, IHS Maritime & Trade. *Data to August.
AHDB released its end-of-January stocks estimate earlier this month. This figure is estimated at 2.13Mt, 15% above last year and 3% more than the five-year average. This is a marked difference on the end-of-November report, which detailed the lowest figures since 2012. The rate of drawdown slowed significantly in December and January. One reason for this could be the later-lifted supplies going straight onto markets, reducing the need for supplies to leave stores. Around 42% of this season’s production is still held in grower stores, above last year by 4%. Still saturated fields are also having an effect on earlies plantings with several-week delays noted. A likely knock-on effect is the delay in getting the early new-crop potatoes onto supermarket shelves for the second week of May target.