The Agriculture and Horticulture Development Board (AHDB) has published the 2022/2023 ‘Early Balance Sheets’ for wheat and barley.
The figures give a first look at grain supply and demand in the UK for the season ahead.
Wheat
A larger wheat crop in 2022, outweighs a rise in demand to lead to a substantial exportable surplus for 2022/2023.
Key watch points for this season include bioethanol and animal feed demand, with margins continuing to be squeezed for both respectively.
With larger carry-in stocks and production, outweighing a projected fall in imports this season, availability of wheat is expected to be 8% up on the year at 18.735Mt.
UK wheat production is currently estimated at 15.664 million tonnes, up 12% on the year, driven largely by higher than average yields.
With a larger domestic crop this year, and imports not pricing competitively, full season imports are expected to drop this season to 1,225 million tonnes, down 769,000t, year-on-year.
Total usage of UK wheat this season is expected to increase by just over half a million tonnes to 15.224 million tonnes, driven mainly by increased demand from the bioethanol sector.
Bioethanol and animal feed
With Vivergo fuels coming back online earlier this calendar year and with maize not pricing that competitively, it is expected that wheat usage by the bioethanol sector will increase this season.
It is assumed for the purposes of the balance sheets that both bioethanol plants will remain in operation throughout the season.
However, with rising input costs and the prospect of cheaper imported ethanol, domestic bioethanol margins are being squeezed. Therefore, bioethanol demand will remain a key watch point.
Usage of wheat in animal feed is also expected to increase slightly on the year.
Despite animal feed production projected to fall this year, driven largely by a drop in monogastric feed, the inclusion of wheat in rations is expected to be higher.
This is due to the sheer availability and relative price competitiveness of the grain this season, according to the AHDB.
Again, animal feed demand also remains a watch point with producer margins being squeezed by rising input costs.
The increase in wheat usage is not enough to outweigh the rise in availability which has led to a balance of 3.511 million tonnes – 31% up year-on-year.
With an operating stock requirement of 1.5 million tonnes, this leaves an exportable surplus of 2.01 million tonnes, more than double the amount in 2021/2022.
Barley
The barley balance is expected to be heavier this season on the back of higher supplies and a reduction in demand. However, the balance remains below the previous five-year average.
Despite smaller carry-in stocks, the total availability of barley this season is expected to be 120,000t higher than in 2021/2022 at 8.229 million tonnes, due to a rise in production.
UK barley production is estimated at 7.19 million tonnes, 229,000t up on the year. The rise in output is due to higher than average yields outweighing a smaller planted area.
As with wheat, barley production has been estimated by AHDB for the purposes of these balance sheets.
Despite a projected rise in usage by the brewing, malting and distilling sector (BMD), a fall in animal usage has led to total domestic consumption of barley to decline by 155,000t on the year to 6.154 million tonnes.
Despite the increase in cost of living, BMD usage of barley is expected to remain robust this year with increased distilling capacity available in Scotland this season too.
Demand for barley in animal feed is expected to fall on the year by 196,000t.
At the start of last season, barley was being included heavily in rations, which was a lag from 2020/2021 when there was ample supply of barley.
With a larger supply and lacklustre demand, the UK barley balance is projected to increase this year by 276,000t to 2.075 million tonnes.
