The Agricultural and Horticultural Development Board (AHDB) has just published an early UK balance sheet for wheat 2024/2025.
The second smallest national crop since at least 1999 has led to a tighter looking supply demand balance for wheat. This is despite larger stocks and forecast firmer imports.
In 2024/2025, total wheat availability is estimated at 16.638Mt. This is down 1.731Mt on the year, driven by a 21% decline in UK wheat production.
While this is well above the level seen in 2020/2021, it is the second lowest since 2013/14. According to AHDB figures, UK wheat production is estimated to be down 2.929Mt on the year, at 11.051Mt.
This is driven by a yearly fall in planted area and yields, with poor conditions through much of the growing season.
While imports were strong last season, with a smaller crop, and reports of lower protein, full season imports are forecast up 163Kt year on year, at 2.600Mt.
Opening stocks are estimated at 2.987Mt, 1.034Mt more than year earlier levels and the highest since at least 1999/2000.
For the 2024/2025 season, total domestic consumption of wheat is estimated at 14.005Mt, down 934Kt on 2023/2024 levels.
This is due to declines expected for both human and industrial (H&I), and animal feed consumption.
Human and Industrial (H&I) wheat consumption in 2024/2025 is estimated to decline by 3% on the year to 7.248Mt.
Bioethanol and energy
This is largely due to reduced usage expected in bioethanol and starch production with lower ethanol prices disincentivising production, as well as a likely shift to increased maize usage in the industry given its competitive price.
Total cereals demand for bioethanol usage is forecast lower this season than last, with reduced wheat usage outweighing a rise in maize usage.
As ever, bioethanol usage remains a key watch point and will be monitored throughout the season.
Current forecasts also assume the resolution to the renewable energy directive (RED II) requirements following the UK’s exit from the EU.
Wheat sales and distribution could evolve significantly through the season if any changes impact on the RED II status of UK produced grain. Wheat usage by the brewing, malting and distilling sector is forecast up slightly this season.
This is due to a strong start to the season and forecast stable starch production, which is included in this figure.
Flour milling
Wheat usage by flour millers is expected to be down slightly in 2024/2025. Following a slow start to the season, reports from industry suggest demand for flour will remain steady over the rest of the marketing year.
Therefore, despite the marginally lower extraction rates expected this season, total wheat demand is forecast down on 2023/2024 levels. Anecdotal reports also suggest this season’s crop is variable, and that overall, protein levels are low.
This combined with the much smaller crop will mean a greater dependence on imports. As such, the proportion of imported wheat estimated to be used this season is higher than last and is just slightly less than in 2020/2021.
Animal feed
Wheat usage in animal feed this season is expected to fall by 668Kt on the year to 6.463Mt.
Total animal feed production is expected to see some growth in 2024/2025, and cereal inclusion is expected to be up slightly on the year.
However, the proportion of wheat used in rations is expected to be lower.
This is due to wheat pricing less competitively against maize and barley. The amount of wheat fed on farm this season is also forecast to be slightly lower year on year, due to the tighter availability, and higher selling price of wheat over other cereals.
The overall wheat balance
In 2024/2025, the balance of supply and demand for wheat in the UK is estimated at 2.634Mt, down 797Kt from levels recorded last year.
This is down 18% on the previous five-year average, though is significantly larger than in 2020/2021. The smaller balance is due to the reduction in supply outweighing the fall in demand.
Taking into account an operating stock requirement of 1.550Mt (up 50Kt from 2023/24), this leaves a surplus available for either export or free stock of 1.084Mt, down 662Kt on the year.
