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Cereals prices to impact on hospitality sector

By James Russell: Cereals prices to impact on hospitality sector

October 11, 2012

The NFU reports that there have been mixed yields across the main UK crops, following a summer of persistent and occasionally torrential rain. Wheat was particularly affected – with yield down 14.1% on the five-year average. Spring barley was down 7.4%, but there was better news for winter barley (up 1.6%) and oilseed rape (up 5.9%).

The NFU 2012 harvest survey found:

  • Wheat: Yields are down 14.1% on five year average, from 7.8 to 6.7 tonnes per hectare. Estimated production from the UK is down 11.1% on five year average.
  • Winter Barley: Yields are up 1.6% on five year average. Estimated production up 0.6% on five year average.
  • Spring Barley: Yields are down 7.4% on the five year average. Estimated production down 9.1% on five year average.
  • Oilseed Rape: Yields are up 5.9% on five year average. Estimated production up 25.5% on five year average.NFU comment

The NFU’s chief combinable crops adviser Guy Gagen commented

“… we have seen a relatively low wheat yield this year, below seven tonnes per hectare. This is something not seen in the UK since the late 1980s. The abnormally high rainfall across the UK since early summer this year has depressed wheat yield.

“The poor UK harvest compounds a series of challenging weather events for farmers around the world, most notably drought in North America. The resulting tight supplies of many feed grains have driven up the prices of agricultural commodities around the world. These UK harvest results will do little to alleviate the global dynamics of commodity prices, with the prospect of relatively high commodity levels through to 2013. Cereals prices impact directly on other sectors, especially pig and poultry farmers who are already struggling with higher feed costs.”

Knock-on impact on poultry farmers

NFU director of corporate affairs Tom Hind said:

“The volatility that we have been experiencing in feed costs recently has been unprecedented and likely to stay.

“Feed is the single biggest cost to poultry producers and many are reporting to me the significant outlay they are having to make to purchase feed compared to last year. It’s now really vital that the whole UK supply chain works together to ensure these additional costs farmers are facing are recognised or else we see a risk of critical mass in domestic production eroding.”

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