Erosion of milling premiums, tight supplies limiting export opportunities and a desire to reduce risk when growing wheat mean end markets are becoming less of a factor in variety choices.
UK wheat production for the 2017/18 year is likely to have been less than 14.5mt and combined with ethanol plants running, which has increased domestic demand, the exportable surplus has reduced considerably.
Jonathan Lane of Gleadell says the UK will be a net importer of wheat this year, as it was last year. “There is likely to be a similar knock-on effect into new crop given the forecast planted area at the back-end of 2017, a poor spring and not a lot of spring wheat going in, so we are looking at a relatively small crop again next year [2018/19 marketing year]. Assuming the ethanol plants are running we will be in a very similar position with a tight balance sheet.”
This means most of the UK crop will be sold on the domestic market, says Mr Lane. “The UK has always been reasonably well balanced. It has been a feature of the last few years that imports have been the main focus; previously there were some opportunities for low grade milling varieties to export to Africa but the current pricing structure is protecting domestic availability.
“Even in a big export year we are only looking at a 3mt surplus. The key focus has always been the domestic market with 10-12mt used at home.”
So finding home market opportunities is key, says Mr Lane. “Look to target your best local market – if you are located close to a bioethanol plant or feed mill grow the biggest crop you can. If you are near a flour mill, grow Group 1s and 3s. There are some good Group 1s at the top end of the yield spectrum that have performed well in the field and are delivering the quality the miller requires.
“There are some Group 3s coming through that are decent yielding varieties so some may look to switch to Group 3 or quality Group 4.”
High take-up of high yielding Group 1 varieties in the last few years has seen milling premiums collapse, says Mr Lane. “Farmers moved from growing 15-20% milling varieties up to 40% milling varieties.”
UK wheat production at harvest 2018 is highly likely to be similar to or less than the 2017 crop unless there is a decline in demand levels or a shift in the import position, according to AHDB senior analyst Helen Plant. “There is a pretty fair chance wheat availability will stay tight for the next season. Unless we have an above average yield or a decline in demand for industrial and bioethanol use we are likely to have a tight wheat balance and potentially be a net importer.”
Hutchinsons national seeds manager David Bouch says the export market has dwindled and there is a preponderance of varieties suitable for UK markets only. “If you look at the market as it currently stands only 6% of it is biscuit wheat [suitable for export]. There are not many around of those Group 3s. Some soft Group 4s are suitable but they are new to the system and a lot tend to be consumed by the UK distilling market.”
Among these soft Group 4s, Elation is new this year, scoring 104 on treated yield - an increase on typical varieties currently destined for this market and with export potential such as Leeds , Myriad , Revelation  and Viscount  - but there is unlikely to be much seed around, with Elation likely to account for no more than 1-2% of the market, says Mr Bouch.
The large area of Group 1s and Group 2s – accounting for 43% of the wheat area now being grown - has seen UK milling premiums collapse. “Last year you could get as much for soft Group 4s as for Group 1s and 2s, with people putting in soft Group 4s because of a slightly larger premium for the distilling market, says Mr Bouch.
“The market has changed to a lot of Group 1s and 2s, not all of which are suitable for export. Group 2s are but in Group 1 only two are suitable – Zyatt which took 5% market share last year and Crusoe, at around 4-5%. Skyfall, which accounted for 12%, is not suitable for export.”
However, farmers are choosing milling varieties to grow with feed markets in mind, says Mr Bouch. “Most people are growing Siskin and Lili as hard feed wheats because they have attributes that are likeable in their situation. If they sold on Hagberg and minimum protein they could get claimed against and in the worst situation rejected. With premiums as they are they prefer it to go for feed.”
Variety selections are becoming less about the end market and more about what suits a geographical situation, he says. “People are growing varieties for cleanliness of crops and that are suitable for their geography. In the East, they are looking for high resistance to yellow rust, in the West, high resistance to septoria.
“Things are driven by yield and quality but people will take something that offers 2-3% less on yield if it has better disease resistance. It may not reduce their fungicide applications but gives flexibility. If you have something that has superior resistance to yellow rust in the East, for example, you are not dashing to that field immediately there is yellow rust pressure.”
So is there anything farmers can do to gain an edge in the market? “There is an argument that with so few Group 3s in the ground, if you can select the right soft wheat with little yield penalty, there could be opportunities for exporting for distilling e.g. Elation or distilling in the UK e.g. KWS Jackal.”
Lee Bennett, head of seed business at Openfield says although the UK has been a net importer for the last couple of years, as soon as it has a bumper harvest export demand will return. “Exports depend on whether we have a bumper harvest or one that just wipes its face. If you are in Kent or near the East Anglian or Severn ports you do yourself a disservice by not giving credence to something that is ukp or uks. It comes down to location. If you are local to a port work on the premise of selecting a variety that fits the domestic market and one that can go on a ship too or you leave yourself only one home to go to.
“In the North there is a deficit so you can grow what you want and it will find a home.”
In Kent, Mr Bennett suggests farmers consider Group 3 wheats or soft wheats with a uks designation. “Last year we saw softs take off again and you couldn’t find Group 3 seed for love nor money but there is more Group 3 seed out this time and a new variety, Elicit.”
The outcome of Brexit will also have an influence, he says. “You never know how Brexit will wash up and whether there will be any tariffs imposed. The domestic home is the one closest to us where it will always be tariff free trade.”
From July 2017 to the end of March 2018, the latest figures available, the top UK wheat export destination was Eire at 154,851t followed by The Netherlands 97,490t, Spain, 83,055t, Portugal, 17,401t and Belgium/Luxembourg, 12,639t.