The "Beast from the East" failed to foil millers and Milling and Grain joined up with them to report on the industry insights from the 2018 AHDB Milling Wheat Conference
It was the worst weather day in 30 years in the UK, with snow causing havoc on Britain"s roads and overnight temperatures plunging below freezing.
Despite all that, many people still braved the elements to attend to the 2018 AHDB Milling Wheat Conference held in Cambridge. The "Beast from the East", as the weather was dubbed, snarled roads and prevented some of the event"s scheduled speakers from attending, so many of the speakers had to step up and handle additional presentations. But despite the weather, the day was filled with insightful presentations and lively discussion tackling many of the issues impacting the industry with speakers from both sides—milling and farming—coming together to share their expertise.
Unfortunately, the weather did take a toll—the conference originally had 184 attendees booked before the bad weather came in. Still, a hardy majority managed to make it the event, many from some far-flung places, including two conference-goers from the Netherlands, one from Alabama in the US, one from Pakistan and two from Ireland (one person registered from Zambia but did not attend).
Peter Kendall Chair of the AHDB
Peter formally welcomed attendees and opened with a brief discussion emphasising the need for the British milling industry to increase productivity. After years of steady increases, of late Britain has been falling behind Europe and North America, primarily during the period covering 2014-2018.
The British farms that are achieving the highest productivity frequently employ their own agronomists. Peter stressed that we need to follow best practices to ensure that we become, once again, suppliers of preference.
Amandeep Kaur Purewal. Senior Analyst, AHDB Market Intelligence
The first session was on Market Outlook and was presented by Ms Purewal, who began with a national and international perspective.
2017/18 saw another record global wheat crop. While that is always good news, there are some complicating issues behind that figure. China is increasing its wheat production but is stockpiling wheat, which puts them out of the world production picture. Other former giants of wheat production are all significantly down. US production has dramatically fallen due to drought and climactic issues. Canada"s wheat crop dipped somewhat, but less drastically. Argentine"s numbers have dropped, and likewise Australia"s harvests have declined precipitously.
The Ukraine and the EU both made modest gains, while a 17 percent increase in the Russian wheat crop is putting pressure on sales of EU wheat. Sadly, the UK is no longer a net importer of wheat and suffers the highest production costs of any producer.
There are a number of reasons for the record crop. New wheat varieties such as Skyfall and Trinity offer high protein and higher yields, providing much-needed flexibility for wheat growers. The trend, however, is to trade off lower protein levels in the pursuit of higher yield. To summarise:
Comfortable global wheat supplies at headline levels;
• Higher element of risk has so far been masked by unprecedented run of high output (Although North American milling wheat is looking fragile);
• Tighter domestic wheat supply and demand balance in 2017/18, with lower share of Groups 1s meeting full milling wheat spec;
• UK no longer an assured net-exporter of wheat – need to adapt mind–set as Brexit approaches;
• New varieties providing flexibility for milling wheat growers.
Martin Savage, Trade Policy Manager, nabim
Martin provided the meeting with a miller"s perspective on current trends in the marketplace.
He began by pointing out the fact that there are a number of challenges to be faced: increased demand for energy, increased demand for food, increased demand for water, and all those issues have to be tackled while mitigating and adapting to climate change.
Martin cited a quote from John Beddington, "we have got to deal with increased demand for energy, increased demand for food, increased demand for water, and we"ve got to do that while mitigating and adapting to climate change. And, critically, we have just 21 years to do it."
The UK population (65.6 million in 2016) is projected to rise to 69.2 million over the next decade, pass 70 million by mid-2029, and rise to 72.9 million in mid-2041.
Martin continued, "British millers must balance yield versus quality both – bread making wheat quality and biscuit making wheat quality."
"What really matters," Martin stressed, is the quality and consistency of the protein resulting in good bread making potential. Protein quality and consistency results in good rheology – very extensible with little elasticity, which results in good export potential."
Martin continued, saying that supply and demand is key for both farmers and millers. Consistent availability is key to all markets. S & D determines prices at home and abroad. British exports are determined by the annual surplus, as long as it meets quality requirements.
The potential impact of Brexit
The 600lb gorilla in the room—and a topic never far from anyone"s mind—was the looming impact of Brexit. Martin broke it down into a number of likely scenarios for the wheat trade:
• Much uncertainty;
• A transition period of 21 months to five years;
• Most likely scenario is a Free Trade Agreement with Europe, with import declarations and same tariffs as EU;
• Customs Union and WTO will continue to exist as a "spectrum";
• Any WTO outcome would probably not have tariffs on wheat & flour;
• Reform of UK agricultural support and need to reduce costs of growing wheat;
• The impact of tariffs would depend on the underlying market. Export tariffs will apply unless there are tariff-free quotas;
• They would segment the wheat market;
• Trading scenarios may change.
The UK is currently a net importer of wheat, to the tune of one million tonnes!
Martin then provided some possible future options the industry can take:
• Grow more quality wheat for the home market;
• Including import substitution – UK farmers are able to grow import equivalents!
• Export more but will have to be price competitive (because of Russia)
However, the key to all of these steps will be:
• Understanding the market;
• Achieving consistent high quality;
• Reducing production costs.
• Group 3 varieties present favourable opportunities;
• In future, costs of production (variable & fixed) will required an even greater focus;
• Post-Brexit opportunities may favour greater import substitution;
• Post-Brexit, export opportunities may change;
• The key is to maintain a close dialogue with merchants and processors.
Stewart Batchelor, Consumer Insight Analyst with AHDB
Stewart provided an insight into what the bread of the future might look like, as influenced by current market trends. AHDB"s Retail and Consumer Insight team actively tracks, monitors and evaluates consumer behaviour. While the loyalty of the British consumer to bread (and bread products) is as high as ever, there is some volatility in the marketplace.
Brexit is an obvious one, as it creates uncertainty about wages and the British economy in general. The greying population is another, with sales of large, family-style loaves giving way to demand for smaller packages of bread.
The rise of foreign bread alternatives such as pitta, tacos, flatbreads, etc., represents a developing trend, although they all still require flour. The rising demand for healthy food, particularly amongst the young, is increasing sales of bread that is perceived as healthier, such as whole wheat bread and "bread with bits." These more specialised forms of bread can often command premium prices. So after reassuring that many trends remain positive, Steward addressed the things we worry about.
Cost of living
The economy and the cost of living, especially with the uncertainty of Brexit is always a concern. As prices rise, consumers are mitigating the increases by shopping at hard discount groceries such as Aldi and Lidl.
Sales seem safe for the foreseeable future, because bread is:
• Low-cost and filling, perfect for uncertain times where rising food prices are a concern;
• Versatile and family-friendly, suitable across all eating occasions;
• Consumers are interested in products that have health benefits, are convenient and exciting.
Sarah Clarke, crop physiologist, ADAS
Sarah was scheduled to speak about "Insights into high yield and quality," but was prevented from attending by he weather. Likewise, another speaker who could not attend was Jenna Watts, senior scientist crop production systems AHDB, who was to speak on "Varieties and Disease, an integrated approach." However, slides from their speeches can be accessed on the AHDB web site: www.cereals.ahdb.org.uk/crop-management/technical-events/milling-wheat-conference.aspx
Andrew Robinson, Farms Manager with Heathcote Farming
Andrew stepped into the breach and provided the farmer"s perspective in his talk, "High Quality Growing." Andrew grows wheat on two different fields located about nine miles apart (one with light soil and the other with heavy soil).
In both cases, Andrew begins his approach with good soil management:
• Prevent/remove compaction;
• Ensure good tillage practices;
• Regular rotational mole ploughing in summer and field drain outlet inspections in winter;
• Increase soil organic matter with introduction of compost/biosolids into a balanced crop rotation
Andrew described how the use of compost on these fields has seen an increase in workability and moisture retention in the soils. Likewise, sewage sludge has also been used pre-OSR to aid building of organic matter. He believes there are six key areas in achieving reliable milling wheat yields and specification:
• DAS, soil management;
• Seed and seedbed management;
• Appropriate fungicide use;
• Fertiliser and PGR;
• Micronutrient management;
• Pre and post-harvest management.
Andrew believes there are a number of strategies that need to be employed in the future to ensure high yields and good quality:
• A large number of in house trials, looking at various exciting things going forward;
• Including our work on variable seed rate trials by looking at both soil type but also looking at varieties as we are noticing different varieties germinating at different rates in the same soil type, fungicide and biostimulent trials;
• Artificial intelligence (A.I.) is without doubt going to be the next stage for us with the use of algorithms for various scenarios (e.g. weather patterns determining fungicide programmes);
• Camera drone technology – more accurate plant counts along with the ability to see disease up to seven days before we can with the naked eye;
• Competent, reliable employees. Andrew employs two exceptional employees n his farm. They have regular, Monday morning meetings to discuss the week ahead but also one big farm meeting every year, open book, they are totally involved in all the trials and some are their trials which they run – this ensues that staff are engaged and understand the business position – vital to increasing wheat yield.
• The meeting adjourned early due to the absent presenters and the desire of many to escape home before dark. However, the mood was energised and optimistic, with many expressing their appreciation of the event and resolving to attend next year"s conference.
by Vaughn Entwistle, Features Editor, Milling and Grain