UK wheat prices: A double whammy

UK wheat prices have plummeted 20% this year – despite the dismal outlook for the UK harvest.

Only a few weeks ago, the NFU warned the wheat harvest could be down 30% on last year, which was itself a bad year.

Lower prices will offer welcome relief for bakers and bring down the feed bills of poultry and pig farmers too. Consumers could also benefit from lower bread prices – there is already some evidence of a resurgence in promotional activity.

But it is not such good news for farmers. Although wheat prices remain high historically speaking, farmers face the double whammy of falling prices and a poor harvest.

Even for a commodity like wheat, in which the UK is normally self-sufficient, prices are no longer determined by supply and demand here – the global situation is what matters.

UK farmers can easily suffer a terrible harvest and yet receive a miserly price for what little they have to sell because of perfect weather conditions on the other side of the world.

It is a reminder that for all its faults – and there has been plenty written about them in the wake of last week’s reform deal – we still need a Common Agricultural Policy.

Farmers need to be supported when the market and the weather turns against them. If not, they’ll quit and then we really would have little hope of increasing global agricultural production by the quantity we’ll need to feed a predicted population of nine billion by 2050.