WHILST on a recent farm tour to Germany, I became aware that the European price of wheat was rising.
I used to grow wheat but quickly realised that any price below £100 was unprofitable and so I stopped the crop on my farm.
That was 10 years ago and since then prices dropped progressively down to the mid-£60s per ton.
All of a sudden there has now been a fairly dramatic increase. But whether I would wish to start growing the crop again is questionable even at these enhanced prices.
Costs have increased considerably since the days when I grew the crop, and whilst I used to be a fairly substantial grower circa 1990, I would now be dwarfed by modern technology: you probably need to grow at least 400 acres.
So what has happened? A year ago feed wheat ex-farm was worth about £73/ ton whereas this year the same product is probably worth about £125 /ton, which represents a price rise of 70%.
This sort of price increase is unheard in British food terms where all politicians believe in a Cheap Food Policy and any notion that a farmer should make a profit is ignored.
There are probably several reasons for this. For a start, prices should not have been allowed to fall as far as they did, thanks to the usual mismanagement by British Government departments: they will do everything in their power to depress food prices, so that excess pay rises can be paid to public sector workers without increasing the rate of inflation.
But the main thing that has happened this year is the potential use of wheat to produce bio-ethanol.
To produce energy from wheat now makes the crop more valuable. It also provides a much more stable price platform for which farmers to plan their future.
There is also the potential to harvest the crop as whole crop so that it can be fed into a biomass plant where methane gas is extracted from the fermenting crop.
This gas can then be used to drive an engine and generator to produce electricity.
In this wettest of years there does appear at last to be a glimmer of hope for arable farmers (but woe for livestock farmers).
Perhaps this renewed optimism will soon spread to other crops such as barley where its previous unprofitability meant farmers no longer grow sufficient supplies to satisfy demand.
I have even heard that milk prices will rise in the near future as spot prices are now considerably higher than farmers’ contract prices.
