Recently we highlighted the Sustain report "Unpicking Food Prices" which examines the proportion of the retail price of food items is paid to the farmer with eyes immediately scanning down to find the cereal products represented by bread. The report indicates that the farmer receives 8% of the retail price of an 800g sliced load which it stated retails at £1.14. For an organic sliced loaf (Sainsbury's sell an 800g wholemeal version of £2.10, or £260 for a Kg). This would be £2600 per tonne and back in March 2022 organic farmers were receiving about £360 per tonne and so this would have been about 13% of the retail cost of the loaf. Earlier in the season this might have been £330 that was paid but this would still have been 12% so perhaps organically we share the value chain better than the conventional market does.
The May 23 wheat futures closed on 20th January 2023 at £226.50 and on 24th Feb 2022 the day of the invasion of Ukraine the same market traded at £227.00 so can we conclude that the UK wheat market has recovered from the shock of the Ukrainian invasion?
Certainly organic imported feed wheat is being offered at levels that value wheat on farm below £400 per tonne and the weakening of the conventional market suggest that values are likely to soften further. One miller who recently bought some wheat suggested he has a bit more to buy but feels values will soften.
Crystal ball time as someone asked where new crop values will be. It is always a foolish thing to put a value on the organic market several months out but currently I think £340 - £360 ex farm is a likely value and I suspect prices will head this way as we conclude this season.