The UK wheat crop has turned out even worse than previously thought,
farmers said, pegging the yield at the lowest in more than 20 years, and
warning of the impact on food and feed prices.
The National Farmers' Union said the UK wheat yield had
fallen to levels "not seen since the late 1980s", thanks to volatile weather
which followed early-2012 drought with "persistent and occasionally torrential"
rain, which brought the country its wettest summer in a century.
The poor harvest has fed through into weaker farmland prices, besides raising expectations for wheat imports, with some market talk that the UK could, unusually, turn net importer in 2012-13.
"The abnormally-high rainfall across the UK since early
summer this year has depressed wheat yield," said Guy Gagen, the NFU's chief
combinable crops advisor.
The union pegged the yield at 6.7 tonnes per hectare, below
the range of 6.8-7.2 tonnes per hectare which consultancy Adas has estimated,
in reports to the HGCA crop bureau.
In fact, the wheat yield in England, which makes up the
great bulk of the UK crop, fell to 6.7 tonnes per hectare in 1992
Better for rapeseed
The NFU was more downbeat on the UK spring barley yield too,
pegging it at 5.0 tonnes per hectare, below the Adas range of 5.1-5.3 tonnes
However, the union was sanguine on barley quality, saying that the
crop was "good for malting".
And it was optimistic over rapeseed too,
pegging the yield at 3.6 tonnes per hectare and oil content as "average".
Adas said last week, in its final harvest report, that the "oil
content of oilseed rape was low at 40-44%".
Threat to livestock
The NFU added that, with the "poor" UK harvest coinciding
with weather hits to crops in some other regions, including drought in the US
and Russia, the country faced "the prospect of relatively high commodity
[price] levels through to 2013".
Besides the impact directly on consumer of higher grain
costs, pig and poultry farmers were "already struggling with higher feed costs"
which are threatening to prompt some producers to quit.
The poultry industry faced "the risk of critical mass in
domestic production eroding", NFU corporate affairs director Tom Hind said,
warning that the "unprecedented volatility that we have been experiencing in
feed costs recently [is] 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."
After a break in early September, the rains have resumed to interrupt
autumn sowings and the lifting of the potato crop, of which 51,000 hectares had
been harvested as of Friday, equivalent to 43% of the total, compared with a level
above 60% a year ago.
"The recent heavy downpours that are capping off the wettest
spring and summer in over 100 years continue to impact the harvest," Shore
Capital analyst Phil Carroll said on Wednesday.
The slow development of potatoes during the dull summer has
also prompted many growers to hold off harvesting, hoping for late boost to
yields, although the harvest looks like being one of the lowest in recent
Produce Investments, owner of the Greenvale potato merchant,
estimates the crop hitting its lowest since 1976, as Agrimoney.com revealed last week.
Low crop expectations have manifested themselves in a rise
in UK prices for free-buy potatoes, those not grown under contract, to £271.04
a tonne as of Friday, up 3.6% in a week, and more than triple levels a year
ago, according to the British Potato Council.
"With adverse weather continuing to restrict lifting and
many [farms] now concentrating on loading into store, supplies remained short
with prices steady to firm," the council said.