It’s 25 March today, and the UK is more or less in lockdown. As the challenges of the epidemic have grown, Openfield has increased our contingency planning to ensure that our members, our customers and our colleagues’ health and well-being are being protected.
All drivers and hauliers will always call ahead to let farmers know when a collection is due. Our driver will be happy to make any adjustments to the way collections or deliveries are made and our contacts just need to let our drivers know when they call. All drivers are briefed about increasing their personal hygiene and all relevant Government guidelines are being followed as we wish to maintain everyone’s safety. Drivers have been asked to maintain a safe distance to anyone on farm and at the consumption points at this difficult time. Our Farm Business Managers remain available by phone and email and will continue to stay in touch in that way.
We have seen extreme market volatility in recent days with wheat futures increasing by up to £7 per tonne, before subsiding. The reality is that in some areas demand is outstripping supply. This is particularly true for bread, so flour and of course milling wheat. Actually its not so much the availability of wheat, it’s the lack of logistics and production capacity. Both of which are required to get flour and bread to the supermarket in order to keep pace with the stripping of shelves!
Its much worse in America where there is even more panic buying and hoarding of pasta and bread than we have in the UK!
A false rumour that Russia was banning wheat exports made the markets worse for a day. In the end we have enough surplus wheat in the UK to see us through to harvest and more than enough feed and malting barley!
I was hopeful – that the sudden increase in wheat values – both old and new – would help to lift barley – but it hasn’t! Whereas wheat would be considered a key ingredient for flour, barley is not. The beer, malt, and therefore malting barley demand has gone the other way to wheat! Breweries large and micro are not able to shift their stocks of beer onto restaurants, pubs and most importantly big sporting events. Beer of course has a shelf life, malt can be kept for six months or more. So as brewers won’t take the malt, so maltsters cannot take the malting barley; so without our export homes we would not be able to clear the barley from farms.
Most of the serious old crop grain marketing was done before the price rises of the last few days. For those with some wheat left, there is the chance to cash in at some £10 per tonne better than could ever have been envisaged. Likewise on new crop wheat with November wheat 2020 futures around £170, that should mean a good improvement on anything you have sold forward so far. Weak sterling has played a big part in this, touching 95p exchange rate to the euro last week. Its back to 92p now. I said before, that given the UK will need to import 3/4 million tonnes of wheat, it’s the value of that at the port, which will decide your ex farm price, not how much has been planted. The good news is that, weak sterling has made that wheat more expensive. Stronger sterling would make it cheaper again and one day it will.
So for now all bets and predictions thus far are void! If you like the price of wheat, old or new sell some! The same applies to barley but the price is not so attractive. The difference with barley is that we will still have to export up to 1.5 million tonnes of new crop. Most of this will be spring malting. I am more optimistic about the economy recovering when this is over: financially the banks were in a much worse state back in the 2008/2009 recession. At least the government has the money to back up its generous support to all. So I am planting early potatoes at my allotment and the healthiest place for you is on the tractor drilling! So lets invoke the Wartime spirit and all ‘Dig for Victory’.