The market is still forming. Buyers have been reluctant to make too much commitment at present given the experience of last year when lower demand meant contracts were slow to complete. In terms of value. We offered feed wheat to one buyer about 10 days ago at £320 delivered which didn't trade as they bought at £315 delivered and on Friday we were bid £271 ex farm which we felt was too low. Our aspiration is for a feed wheat value of £300 ex farm but in reality it may be we have to accept lower values as spot values for conventional wheat are at around £180 ex farm and the current general economic climate don't really support significantly higher premiums especially if SFI is available to support conversion.
Harvest reports suggest that yields are OK but it certainly doesn't feel like a bumper harvest although the later season rains seem to have filled grain better than might have been feared. Certainly the crop assessments of the trials that Dom has been undertaking has indicated that crops that were behind following later drilling have recovered well and seen a lot of development late in the season perhaps able to do so as moisture was not a limiting resource as it might be in other seasons in high summer.
The news that Mole Valley have taken over the ABN mill at Uffculme which will become a dedicated organic mill is an exciting development. Having a dedicated organic mill allows for greater variety of raw materials to be used and so the opportunity to use inconversion grains or out of spec gains (within reason) increases which can support organic cereal production.
The changes outlined in the SFI are encouraging as organic farmers will have some ability to "stack" options providing greater income derived from public support. This will help replace monies lost through the modulation of BPS. This will make farmers less reliant upon market price for grain and so it seems likely that the organic premium will erode over time if organic farmers are able to receive a greater level of SFI funding then conventional farmers.