UK grain prices have been under pressure since 2016 due to lower grain demand for animal feed, increased wheat availability and the largest end-of-season wheat stocks.
The latest AHDB supply and demand estimates for the UK for the 2022-23 season show that total wheat availability increased by 7% year-on-year to 18.61m tonnes.
Also Read: UK wheat prices continue to fall on global supply pressures
Some support for grain markets will come from additional demand from human consumption and industrial uses, with a projected increase of 219,000 tonnes year-on-year to a total of 10.57 million tonnes in 2022-23.
However, a larger 335,000 metric tonne drop in demand for grain for animal feed to 12.78 million metric tons per year will more than offset this.
The report states: “Pig feed production is expected to continue to decline, as is demand for poultry feed.
“Demand for cattle feed has declined over the past season and is expected to remain low in 2022-23. However, some regions have experienced poor forage quality, which increases the need for forage.”
Farm-gate spot prices for feed wheat collected by Farmers Weekly on Friday 27 January averaged £218/t, while milling wheat averaged £277/t.
Looking at the UK futures markets, feed wheat recovered somewhat towards the end of the week.
Contracts for May 2023 were at £230/t midday on Friday 27 January, up £4/t from the week before but still £11/t down from the start of the year.
Focus on export
AHDB analyst Olivia Bonser said: “With such a large surplus of domestic grain this year, a key observation point is how much we are exporting this season.
“Wheat exports were originally forecast at 1.15 million tons, up 639,000 tons from last year.”
Ms Bonser said to reach that level the UK would need to export at least 100,000 tonnes per month on average for the remainder of the season.
barley
According to the report, the total availability of barley in the UK for 2022-23 was estimated to have increased by 316,000 tonnes year-on-year to a total of 8.42 million tonnes.
Barley end-of-season stocks are estimated at 1.16 million tonnes, up year-on-year but still at the level of the 2019-20 and 2020-21 crops.
Feed barley was fed to wheat at a discount of £18/t on Friday 27th January, with farm-gate barley costing an average of £200/t.
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