U.K. Wheat Crop Seen Smallest Since 2001 on Drop in Sowing

The U.K. wheat harvest, historically the European Union’s third-largest, may be the smallest this year since 2001 after winter-crop planting decreased, according to the government.

Farmers may gather 12.1 million metric tons of the grain, the country’s main arable crop, down 8.7 percent from 13.26 million tons last year, the Department for Environment, Food & Rural Affairs said today in its first forecast for 2013 grain production. Barley output may jump 29 percent to 7.1 million tons, the biggest crop since 1997.

The U.K. saw its second-wettest year on record in 2012, according to the Met Office, slashing the quality of last year’s wheat and preventing farmers from planting winter grain and rapeseed crops that were harvested this year. Farmers instead boosted planting of spring crops including barley and oats after the weather turned dryer since the beginning of 2013, said Jack Watts, a senior analyst at the Agriculture & Horticulture Development Board in Kenilworth, England.

“Last year we had a small crop with poor quality,” Watts said Oct. 11 in an interview at the European Commodities Exchange in Paris. “This year it’s still a small crop, but the quality is much improved. Normally we have some of the cheapest feed wheat in Europe, but this year we may be one of the most expensive.”

U.S. Drought

Feed-wheat futures on NYSE Liffe in London climbed to a record last year amid rallies in crop prices worldwide following drought in the U.S., the world’s biggest corn grower and exporter. Feed wheat for delivery in November traded at 162.75 pounds ($260.35) a ton today, up 8.5 percent from a low on Sept. 18.

Defra said it will release estimates of wheat and barley yields and crop area, as well as figures for other grains and rapeseed, on Oct. 17. The agency is scheduled to update its balance sheet to include grain-demand estimates on Nov. 27. France and Germany are the EU’s two biggest wheat producers.

U.K. wheat imports will drop to 1.41 million tons, 52 percent less than the previous season, when purchases were the highest since 1978, the AHDB said today in an e-mailed report. Human and industrial usage, including consumption by millers and ethanol makers, may rise 1 percent to 7.62 million tons, while animal-feed usage was pegged at 5.79 million tons, 15 percent less than the prior year.

The country’s wheat surplus, available for export or to be held in stockpiles, may be 460,000 tons, down from 1.47 million tons a year earlier, the AHDB said.

Wheat use by millers in the U.K. totaled 497,000 tons in August, up 4 percent from a year earlier, Defra said in a separate report today. Brewers, malt makers and distillers used 60,000 tons of the grain during the month and 152,000 tons of barley, for respective annual gains of 4 percent and 7 percent, according to the report.

Before it's here, it's on the Bloomberg Terminal.