The level at which a region disposes of its surplus products (exports) or purchases supplies from abroad (imports) sets the price of most agricultural commodities. The UK is a major producer of wheat, mainly of animal feed quality, malting barley, for beer and whiskey production and Oilseed Rape for cooking oil and bio-diesel. Also produced in lesser quantities are Oats Peas Beans Linseed.
Until recently, agricultural production was driven by crop subsidies paid by the European Union, either guaranteeing a minimum price or paying a subsidy per acre planted. Now a government subsidy is paid directly to farmers which reduces every year and which is not linked to the crops grown, the purpose of which is to bring about a transfer to a free market system. Periodic “World Trade” talks are attempting to move all countries and trading blocks through a similar process to a world trade in commodities driven entirely by supply and demand.
Wheat
Wheat is the largest combinable crop grown in the UK by tonnage or area sown. In most years the UK exports between 2 – 4 million tonnes. The market for this is normally to the southern Mediterranean countries such as Spain or Italy to provide a cheap feed source for intensive livestock production. The price achieved depends upon competing supplies of wheat (French, Russian Ukrainian, American) and the cost effectiveness of wheat relative to Maize (also referred to as Corn). In some years when quality is good UK wheat can be sold into premium markets for human consumption, recently supplying South Africa, Tunisia and Morocco as well as different buyers within the Mediterranean.
Within the EEC wheat is traded purely on cost per tonne delivered. However to import in to, or export from, the community, traders require a licence from the European Union Commission, these may attract a tax or a subsidy, raising or lowering the price, providing a buffer on price movements within the community.
Within the UK wheat is used according to type for Bread-making, Cakes and Biscuits, Animal feed, Glucose and Starch production and soon to be Ethanol for fuel. Each market has specific end user requirements, which are determined by the type (variety) of wheat sown.
Barley
Barley sold from farms is primarily grown for malting, for the production of beer larger or whiskey. A significant amount is grown for feeding as it can be fed directly to animals unlike wheat. Most feed barley is fed on the farm on which it is produced.
Malting barley has to be able to germinate (to produce malt) and has to be harvested and dried carefully to protect the seed. The UK is normally a surplus producer of malting barley, the excess (normally the spring-sown type being sold to processors in Northern Europe.
Oilseed Rape
Oilseed Rape is a relatively new crop encouraged by a growing world demand for cooking oil, vegetable protein (from the meal left after crushing) and bio diesel. The oilseed rape grown within Europe is not Genetically Modified unlike other areas of the world and can command a premium price as a result.
Oilseed rape is a difficult crop to grow and is vulnerable to hard winter so although the UK is broadly self-sufficient we can at times be exporters (to Germany for bio fuel) or importers from countries such as Poland.
Oats
Once a part of the rotation of nearly every farm Oats are now a minor crop and usually grown on contract for the miller. Supplies of cheap, high quality spring oats from Scandinavia are freely available and the closure of several mills in the south has tended to move the area of oat production to the north and west of the country.
Beans
Beans are grown for animal feed or exported for human consumption to the Middle East. Beans for human consumption need to have pale skins free and free from insect damage. In most years human consumption samples attract a substantial premium to feed beans. Beans provide a source of GM free protein for livestock rations in the UK, they can also be exported to Europe as a feed ingredient.
Peas
Peas are either harvested fresh for direct sale, freezing or canning (known as vining peas) or combined dry for the production of mushy peas or flaked as a pet food ingredient. The combined pea acreage has fallen dramatically due to the increased popularity of wheat and malting barley, which require harvesting at the same time, and are less vulnerable to poor weather at harvest.
Linseed
Although a minor crop Linseed or Flax has been grown in Europe for many years. The area sown declined sharply following the removal of crop specific subsidies and the availability cheaper supplies from Canada. Linseed is no longer crushed for oil in the UK but the seed is exported for the production of Omega 3 oil containing health foods to Europe.
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