- Location
- Stoneleigh
As we continue through our alternative crops week, it is important to look at how gross margins shape up both for spring crops for harvest 2021 and all crops for harvest 2022.
Values for small area crops, such as soya and linseed, are included in these margins. It is important to note that the size of these markets may preclude higher margins, if there is a large increase in area.
Spring crops for harvest 2021
Unsurprisingly given the high prices at present, spring wheat delivers the highest margin. This suggests that we could see a strong year for spring wheat. However, this will depend on the availability of seed.
Spring malting barley is also favourable, using a historic basis of malting barley to feed wheat futures. However, we may see premiums continue to be affected by the impact of COVID-19 on the hospitality sector. If we see prolonged closure of pubs then demand for barley in the brewing sector may also decline longer term, eroding premiums and limiting margins for malting barley.
Some of the alternative break crops also perform well. But, we need to consider that the size of those markets could affect the ability to achieve those premiums.
Lower input break crops could well see an increase in area, as declining BPS payments create uncertainty and there is potential for an increased focus on environmental impact. Spring beans in particular, with a zero nitrogen input, have a very strong return on variable costs.
Harvest 2022
https://ahdb.org.uk/news/harvest-22-gross-margins-drop-off-for-barley-analyst-insight
Join the 3.4K people who subscribe to our Grain Market Daily publication here - https://ahdb.org.uk/keeping-in-touch
Values for small area crops, such as soya and linseed, are included in these margins. It is important to note that the size of these markets may preclude higher margins, if there is a large increase in area.
Spring crops for harvest 2021
Unsurprisingly given the high prices at present, spring wheat delivers the highest margin. This suggests that we could see a strong year for spring wheat. However, this will depend on the availability of seed.
Spring malting barley is also favourable, using a historic basis of malting barley to feed wheat futures. However, we may see premiums continue to be affected by the impact of COVID-19 on the hospitality sector. If we see prolonged closure of pubs then demand for barley in the brewing sector may also decline longer term, eroding premiums and limiting margins for malting barley.
Some of the alternative break crops also perform well. But, we need to consider that the size of those markets could affect the ability to achieve those premiums.
Lower input break crops could well see an increase in area, as declining BPS payments create uncertainty and there is potential for an increased focus on environmental impact. Spring beans in particular, with a zero nitrogen input, have a very strong return on variable costs.
Harvest 2022
https://ahdb.org.uk/news/harvest-22-gross-margins-drop-off-for-barley-analyst-insight
Join the 3.4K people who subscribe to our Grain Market Daily publication here - https://ahdb.org.uk/keeping-in-touch