No increase in cereal prices
DESPITE large areas of the UK having winter crops under water for much of the season, and a reduced acreage of cereals sown to date, ex-farm prices are unlikely to rise.
Mr King pointed out that in 2023, production of grain is expected to have outstripped global grain demand for a third consecutive season, pressuring prices and keeping the balance of stocks to use in the coming year, stable.
“While the size of the UK wheat crop will be smaller year on year, the direction of prices will be be driven globally. The UK wheat and barley crop in 2023/24 accounts for 1% of global production,” he said.
To illustrate the trends in cereal farm profitability in Scotland, Andersons Centre Loam Farm model, comprising 600ha running a rotation of winter wheat, spring malting barley, winter barley/oats and winter oilseed rape, is expected to make a loss from farming in 2024 before support of -£68 per ha.
For cereal and combinable crops he said weather volatility poses one of the most significant challenges outside the farmers’ control now. Cropping conditions for 2024 are poor and while some costs have fallen, labour and machinery costs remain one of the biggest challenges affecting the sector.
As a result, Mr King said the most productive land will have to work harder and look for premium markets such as low carbon grain, which also comes with extra costs and possibly reinvestment.
Looking at the potato sector he added: “One of the challenges for the larger area expected to be planted in 2024 will be poorer availability of seed across the EU.”