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Dynamic Wheats: Make the most of export opportunities for quality wheat

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This series is sponsored by KWS.

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The second in this three-part series from KWS looks at how a new wave of varieties on the Recommended List could help boost margins over feed grain and rebuild the UK’s status as an exporter of quality wheat to global markets.

Domestic producers have already gained a strong foothold on the export ladder after weather-related problems with the 2014 French harvest saw a significant upturn in UK exports of low-grade milling wheat to North African countries, and experts say it is vital to build on this success by selecting varieties with market flexibility.

 

This season, 200,000-300,000 tonnes of low protein milling wheat (typically 11-11.5%) has so far been exported to North African countries such as Algeria, Tunisia and Morocco, attracting premiums of up to £20-25/t at their peak over feed wheat.

 

David Eudall from Nidera says: “After the export successes this year, hopefully North African buyers will consider the UK a more viable supplier in future. The past two years have proven, barring weather disasters, UK growers can produce the quality needed and we have the volume and export facilities to meet buyers’ needs.

 

Quality

“There is no reason this performance cannot be repeated, as long as we produce varieties to deliver the quality for these markets.”

 

Mr Eudall says the premium has been particularly strong this season and has since fallen from its peak, but insists there is likely to be a financial incentive to grow for low protein milling markets in future – something which is not possible from out-and-out feed varieties.

 

“We will always be competing against the likes of France and Germany, so the price has to be right, but the varieties coming through at least give growers the flexibility to supply these markets.”

 

Agrii’s national crop marketing manager Francis Pickering says lower grain prices are prompting growers to reassess variety selection based on market opportunities, but stresses these must be planned carefully around end-user requirements.

 

“Past years have seen some big prices which growers have been able to capitalise on by chasing yield. But after two years of global production outstripping demand, this is no longer the case and anyone focusing on feed wheat has to compete with lowcost production from the likes of the Black Sea region, the EU and US.”

 

He urges growers to identify local market opportunities, whether feed compounders, domestic millers or exporters and be clear on specification before selecting a variety which can meet those demands.

 

“Ask yourself ‘what are you growing and why?’ Chasing yield by having the entire farm down to low quality feed varieties is a big risk and limits your marketing options.

 

“There is still a place for feed wheat, but there are a number of varieties on the Recommended List with attributes to offer the opportunity to grow a crop which could go into a number of markets and ultimately produce a better gross margin.”

 

North African users typically need 11-11.5% protein, a Hagberg of at least 225 seconds, 74-76kg/hl specific weight and 14-14.5% moisture content. The latter is potentially the biggest challenge for the UK’s maritime climate, especially as Egyptian markets require a strict 13-13.5% moisture, says Glencore’s Tom Eaton.

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Opportunities 

“We are competing for these markets with a number of other EU origins, so there is no guarantee we will be exporting to them every year, but there are clear opportunities, alongside our core customers in Spain, Portugal and Ireland.”

 

Growers close to ports along the south coast and into East Anglia are best placed to capitalise on exports to the near continent, but there are good opportunities from domestic users in the north west, north east and the Midlands, he adds.

 

Robust disease profiles, consistent yields and grain quality of new varieties, such as KWS Lili and Skyfall, could give scope to grow them in a similar way to feed wheat, without needing significant extra fertiliser to achieve required protein.

 

Mr Eaton says: “In some years, you may not achieve the spec or the premium might not be there, but if it has been grown as a feed wheat, you haven’t lost anything. What you will have is the flexibility to access different markets and the potential to gain a premium when the opportunity arises.”

 

Mr Pickering says there is still the opportunity to chase full milling specification if and when appropriate, but the robustness and consistency of new quality wheats means they are no more difficult to grow than many other hard Group 4 varieties – many of which started out as Group 2s.

 

He says: While KWS Trinity is probably best grown for full-spec milling markets, KWS Lili, for example, has been one of the most consistent varieties across Agrii trials and fits nicely with the likes of JB Diego and Dickens in terms of its agronomy. With Timaru in Lili’s parentage this gives the variety a good stability.

 

“It has the potential to achieve a premium if the protein is there, although this will depend on the yield dilution and how much growers want to commit to adding extra protein in the form of nitrogen. Again, it comes back to identifying the market options and deciding how best to approach them.

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