British farmers are rushing to sell their big harvests of wheat and barley before October to avoid the potential market chaos of a no-deal Brexit.
The UK may reap the most feed barley in four years, and wheat prospects are also improving, according to the Agriculture & Horticulture Development Board. Coupled with the risk that sales to the European Union may plummet if the UK departs without a deal, that is spurring a surge in early-season grain sales.
About 63,000 tonnes of barley were sold from farmers for spot delivery in the week ended August 8, AHDB data show. That is the largest in records to 2,000, and feed wheat sales reached a three-year high.
“We are seeing a lot of spot demand coming in,” said Edd Britton, a trader at Bartholomews Agri Foods Ltd in Chichester. “Our malting barley programme is way ahead of where it usually is.”
The UK is one of the EU’s bigger barley growers and often exports about 15 per cent of its harvest, mostly to brewers or pig farmers within the bloc. Early wheat and barley yields are both holding above average, AHDB data show.
That swelling supply may face hefty EU import tariffs if an agreement is not struck before Britain’s departure, with some grain potentially facing taxes above €90 a tonne. Prime Minister Boris Johnson has said the UK will be ready to leave on October 31 with or without a deal.
“The market is in a bit of a race against time, and deals are not being done past October,” said Jonathan Arnold, trade director at grain merchant Robin Appel Ltd in Southampton.
The UK may look further afield, such as North Africa, to offload its surplus. That has happened before after large harvests, though the markets are more commonly supplied by French and Black Sea grain. The weak pound has made British supply more competitive and prices may fall further after Brexit, according to AHDB analyst James Webster.
Tom Bradshaw, a farmer in Essex, said this year’s spring barley crop ranks among the best he has collected. Still, there is uncertainty about quality in parts of the UK as rains soak some fields just ahead of harvest. That would normally encourage him to store grain in hopes of higher prices, but he is not willing to take the chance this year.
“We’ve decided to sell our surplus, so it will all be gone before the end of October,” Bradshaw said. “A no-deal certainly isn’t the right decision for agriculture. I just cannot understand the logic.”
Source; BL
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