UK Flour Millers produced an economic briefing in September, highlighting the inflationary pressures in the wheat, energy and transport markets. A follow-up harvest briefing was produced in late October, providing more information on the 2021 UK wheat crop and its quality.
Whilst the 2021 crop is a big rebound on the poor 2020 crop, wheat prices remain significantly elevated owing to small carryover stock and strong domestic demand, alongside a very tight global cereal supply and demand landscape. Since the publication of the harvest briefing, the wheat price has only increased and delivered UK bread wheat quotations stand at record levels.
These price trends have not flown under the radar and there has been significant press coverage over recent weeks highlighting the rise in wheat price and the potential impact on the cost of bread and baked goods. Many articles are also picking up on the high fertiliser prices and what this could mean for the 2022 harvest if farmers are unable to apply as much fertiliser and yields are lower as a result.