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Dynamic Wheats: Keep market options open

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With many farmers facing wheat prices below the cost of production this harvest, there is a real need for greater focus on growing quality wheats to broaden marketing options, experts say.

 

It is more than two years since a world shortage of feed grains pushed UK prices through the record £200/tonne barrier, a time when ’barn-filling’ Group 4 varieties were at their most popular, accounting for almost 60% of GB wheat area, and delivered a healthy return.

 

Much has changed since. Bumper crops and lower global demand have seen stocks recover and prices drift to nearer £120/t ex-farm for 2015 harvest, highlighting why growers must broaden the marketability of crops, says HGCA market analyst Jack Watts.

 

“Feed grains are purely a commodity market dictated by supply and demand, which is always going to be very volatile.

 

“In recent years, it has worked in our favour when there was a shortage of feed grains, but times have changed and domestic feed wheat faces considerable pressure from [cheaper] imported feed grains.”

 

Falling oil prices highlight the vulnerability of producing large quantities of wheat for the bioethanol market, which is likely to take less grain than expected, Mr Watts adds. “The picture is uncertain, but it is clear bioethanol is not a bottomless pit of demand for feed wheat in northern England.”

 

These factors all underpin the importance of selecting a variety which has market flexibility, says Mr Watts, who believes new Group 1 and 2 varieties, such as Skyfall, KWS Trinity and KWS Lili, could lead to a resurgence of quality wheats. Groups 1 and 2 together account for just 25% of the GB area. He says: “The growth of Group 4s appears to be slowing. It will be interesting to see how new varieties increase the quality wheat share.”

Interest

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These latest additions to the Recommended List have gained interest from growers and end-users due to the promise of comparatively high yields plus good grain quality, potentially making them suitable for a range of markets, he says.

 

“Group 4s have historically offered a yield premium over quality wheats, but the lower grain quality means they have relatively narrow market potential, namely feed or ethanol. New Group 1 and 2s are challenging the yield gap and offer a far broader spectrum of market options, such as domestic milling or export, as well as feed or ethanol.”

 

Although there will always be a place for Group 4 varieties, George Mason, chief wheat buyer at Hey- gates, believes the renewed interest in quality wheats is positive for the UK, which needs to shrug off its ‘feed wheat supplier to the export market’ image.

 

“Demand for breadmaking wheat is consistent in the UK and I am sure every miller in the country would prefer to use 100% home-grown wheat if they could. Importing wheat to landlocked mills is expensive.”

 

Domestic production could displace a proportion of imported wheat, although some imports are needed to provide the strong flour used in certain products and ensure consistent supplies in bad harvests, he says.

 

Mr Mason urges farmers to select varieties and tailor their management according to end-user requirements, but acknowledges continuing pressure on production costs, particularly fertiliser, could deter some from pursuing full-specification milling premiums. This may result in Group 1 or 2 varieties being grown as feed wheat, with a view to having a range of potential markets depending on grain quality.

 

“Although full-specification bread wheat requires 13% protein, most domestic flour millers have fallbacks to 12% and low-grade breadmaking types can have fallbacks to 11%, so there is potentially a wide range which can achieve a premium.”

 

He says export markets, particularly to North Africa, want to buy ukp lower protein (typically 11.5-12%) breadmaking wheats. “End-user requirements vary considerably, but there is more flexibility than you think,” says KWS value chain manager Kirsty Richards.

 

“The key is to build relationships with buyers to understand requirements then select a variety which can deliver.”

Key variety comparison
                                                                                                       

 

nabim group

Approved for quality uses

Treated yield
(% of controls)

Mildew

Yellow rust

Brown rust

Septoria tritici

Eyespot

Skyfall

1

Yes

102

6

6

8

6

[6]

KWS Trinity

1 [P]

Yes

102

9

9

8

5

[7]

Crusoe

1

Yes

99

7

9

4

6

5

KWS Lili

2

Yes

105

9

7

5

6

[5]

Panorama

2

Yes

100

7

7

6

5

4

Cordiale

2

Yes

97

6

5

4

5

5

JB Diego

4

No

102

6

8

5

5

4

KWS Santiago

4

No

105

4

6

6

4

5

 

Source: 2015-2016 HGCA Recommended List

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