Global Wheat Prices

Suddenly, 2011 is off at a gallop, the struggle with the snow and severe frosts in December a distant(ish) memory and Snowdrops are showing shoots through slumbering soil.

Once again, though always missing our cows, I am so relieved that we are no longer dairy farming, and struggling with frozen water pipes, (150 cows producing 4,000 litres of milk needed roughly 10,000 litres of drinking water a day), tractors that will not start, milking plant that refuses to co-operate and the threat that the milk tanker will not be able to reach us to pick up the previous 24 hours’ production that has filled the refrigerated capacity with no spare to accommodate a ‘no show’.

 

Oakley: a month in the life of a wheat plant

This is a quiet period for Oakley before it starts to rev up as the air and soil temperatures warm (You may have noticed that I hesitate to be gender specific with Oakley. My father would have had no hesitation in calling it ‘him’!) The snow cover has acted like a blanket and prevented the coldest temperatures and biting wind damaging the young plants. They looked quite perky as the snow melted. My grandfather used to say, in his pre-inorganic fertilizer farming days, that a covering of snow was as good as a dressing of manure.

Winter Wheat is a biennial plant: i.e. it theoretically needs two years to come to grain production and harvest. However, by planting in the autumn and having a cold, short-day period, a process called vernalisation occurs which activates the onset of the second year of the two year cycle so that it will produce grain this coming harvest. If it were to be planted in March 2011 it would grow but not produce any grain until harvest 2012. Spring Wheat plants on the other hand will produce grain this year if planted in March: they have a different botanical ‘programme’.

Winter and Spring varieties of Barley and Oats would behave in the same way as Wheat, as described above.

Generally the soil is too wet to do any field operations that may have been delayed earlier in the autumn, post drilling. Frost does theoretically mean that tractors can travel without causing damage if there is some operation that is due or overdue. Our wheat crops have had a granular herbicide applied that works from the soil and is taken up by plant roots. It is particularly effective against Blackgrass and Wild Oats, two highly competitive grass weeds (grass as opposed to broadleaved and therefore genetically closer to the growing crop ) that are very difficult to control later in the spring and would cause significant yield loss if left uncontrolled. The bullies in the playground for Oakley!

 

Interesting Statistic of the Month: EU Farming Support

In spite of the EU supposedly being a Common Market, I read an article discussing the proposed Reform of the CAP (Common Agricultural Policy) in 2013. It stated that the annual Single Payments made to farmers at the moment vary from 100 Euros / hectare in Latvia to over 500 Euros / ha in Greece and Malta. Farmers in the UK receive just over 200 Euros / ha and the EU average is 249/ha. Certainly in the UK in a number of recent years there has been no surplus to invest in updated machinery and buildings etc. from the margin from the crop alone, without this Single Payment.

 

Global Wheat Prices

Wheat and Oil Seed Rape prices worldwide continue to hit the same record highs as they did 2 – 3 years ago. As I mentioned last issue, there are a variety of reasons for this, some of which ebb and flow and some of which are more likely to be permanent. As with other high commodity prices worldwide at the moment this brings short term opportunity to producers like us, assuming that we are able to catch the market at the right time, which is not a foregone conclusion.

However, producers are also consumers, and this price volatility upsets the balance in the associated economies and household budgets. Virtually everyone in our society eats bread in some form or other and that will increase in price as wheat does. Pigs, poultry and dairy cows have a significant proportion of grain in their diet, so the rise in their feed costs will hit those producers unless they can pass on much of that to the consumer, who is in turn affected.

In some ‘poorer’ countries where a much higher proportion of wages is spent on food and other basics this becomes a much bigger problem and leads to hardship and unrest.

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