Will a poor harvest mean more cereal imports and increased bread prices?
10, October 2012
A difficult harvest for the majority of UK farmers means millers have been forced to look elsewhere for wheat to fulfil demand at the top end of the market.
Industry experts openly admit that the 2012 harvest has been one of the most challenging on record, with more than half of the job still to complete at the beginning of September. Variation in weight and yield has been enormous on individual farms, not just regionally, and as a result UK growers are going to have trouble supplying the home market.
The huge fluctuations in weather conditions across the UK meant that while some farmers have reported a reasonable harvest, others have reported yields that are 5%-10% down, while some have experienced their worst ever.
In response, millers have reiterated their commitment to UK growers, but the low quality of the grain has meant less flour produced per tonne of wheat and this will force millers to look outside the UK to supply the UK demand and this of course presents added opportunities for companies such as John Good Shipping.
Millers currently source around 80% of their grain from the UK, but this will inevitably take a hit this year, meaning more cereal imports. This is bound to have an effect on the price of flour, but how this will impact on the price of bread remains to be seen as drought conditions in the US, a key exporter, will also mean higher prices due to lower yields.