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London: Britain's farmers are growing more wheat this year and yields are likely to rise, raising the spectre of a feed grain supply glut that could ease prices and help the country's ailing livestock sector.
Farm ministry figures on Thursday showed the wheat area in England had risen 10.4 per cent, partly in response to record global prices, and production could rise by 20 to 25 per cent if yields reach at least average levels.
"It [the wheat crop] is looking fine. Yields above eight tonnes per hectare are possible," analyst Susan Twining of crop consultants ADAS said, noting the current five-year average is 7.8 tonnes and last year was a below normal 7.2 tonnes.
The livestock sector has been struggling with record high grain markets, driving up meat prices and adding to the overall inflationary pressure coming from food.
Traders and analysts said the quality of this year's wheat crop may provide the key to finding export markets for the anticipated supply surplus with higher quality milling supplies much more likely to attract international demand.
"If the surplus is mainly feed grains that is a concern for the price," said wheat trader Simon Ingle of Britain's largest farmers co-operative Grainfarmers.
Ingle noted, however, that there had been a drop in the sowings of varieties more likely to produce milling quality supplies with many farmers opting for high yielding wheat that generally only attains feed standard.
"It is the high yielding group four wheat that has caught our imagination and a good 50 per cent of the crop is a group four variety," he said.
"You are absolutely on the back foot before you have even harvested it."
The rise in wheat area also reflects the suspension by the European Commission last year of a rule which forced farmers to leave some land fallow, known as set-aside, in a bid to increase grain supply at a time of shrinking global supplies.
That will also increase wheat area in other European Union countries.
Spanish winter grain
Spanish winter grain plantings increased by 6.1 per cent this year although one of the driest winters in memory is causing concern for crop development.
"It [increased plantings in Spain] might increase the availability of Spanish domestic grain and that would restrict export demand from the UK," Alistair Dickie, Director of Crop Marketing for the Home-Grown Cereals Authority said.
If sufficient exports cannot be secured then it may take lower prices to stimulate renewed demand from the animal feed sector in Britain. For 2007-08, a drop of about nine per cent in animal feed usage of home-grown wheat is anticipated to 6.06 million tonnes, government figures show.
A survey issued by Britain's farm ministry on Thursday put the total number of pigs in England, as of December, down 1.5 per cent from a year earlier, cattle numbers 2.1 per cent lower and sheep and lambs only rising 1.1 per cent because farmers were holding back lambs from sale because of poor prices.
Dickie said, however, that although British wheat prices may seem high in historic terms it remained significantly cheaper than US soft red winter wheat.
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