Suffolk farmers grapple with wheat price quandary

Today, East Anglian farmers are considering whether they should hold out when the current futures market price is around £276/t - a whopping £106 or so more than they might have achieved this time last year. The mid-May high has given some growers pause.

Josh Dewing, a grain trader with Dewing Grain (Image: Dewing Grain)

Such is the state of cereals market at the moment, says Josh Dewing, of Dewing Grain, a grain marketing and storage firm which operates across Norfolk and Suffolk.

Some are biding their time and looking for another chance to catch the market at its absolute height, he says.

"It's still an amazing price because the yields are going to be good but the problem is they have seen such good prices just over a month ago," he explains.

"The same time last year they were looking at £170/t on the futures market. You can take £6 off and you can get roughly your price ex-farm."

At harvest, you can raise that to a £12 discount because the crop is in abundance at that point. But he adds: "It's a great price."

And this year's crop - just a few weeks or so before harvest begins - is looking promising, he says.

"They genuinely are looking very good," he says. "East Anglia is looking strong." There are stresses and strains in some of the southern areas including drought-ridden parts of Essex which are putting some crops under stress but other than that, the signs are generally upbeat, he says.

At the same time, the international situation is far from certain. There is talk of opening up a "grain corridor" out of Ukraine but this could be fraught with difficulty with the sea ports blocked by the Russians. Ukraine - a major grain exporter - keeps just 5% to 10% of its crop for itself and exports the rest, he says.

Meanwhile France is expected to have its worst harvest since 1976 due to a lack of rain up until June, and other parts of Europe aren't looking too strong. The US - where predictions for bad weather have been fairly dire - looks to have exceeded expectations and Australia has brought in a bumper crop.

However, while it "sounds stupid" to say that wheat is cheap at the moment, with the world's problems he thinks that £290/t to £300/t is about the right value.

The UK is expected to produce around 15m tonnes of the crop, of which around 2m tonnes will be exported.

Many countries around the world simply won't be able to afford current prices and "the world could be in a bit of a dark place" come October to December, he predicts, and prices of inputs are still very high.

"We are telling farmers if they buy fertiliser, sell wheat," he says.

Before this year, a farmer would have "snapped your hand off" for the current wheat prices - and barley will be the same, with malting barley and wheat both premium crops. Oats is also a crop growing in popularity, he says.

"I think there's going to be a lot of competition for things to grow next year because people are getting more conscious of what they are eating," he says. "I think we in a good spot really."

The Covid pandemic and war in the Ukraine both underlined the need to produce food in the UK for the home market, he believes.

"It just proves you have got to produce your food in your country," he says.