This year saw a UK barley crop of over 8.4 million tonnes produced, but the bumper crop will not make up for the reduction in wheat production.
There was a sharp decrease in the area planted to winter wheat in the UK in the season gone by and a large increase was seen in the UK barley area.
The wheat area was reported to be the smallest since 1981 at the Agriculture and Horticulture Development Boards's (AHDB's) Grain Outlook Conference recently.
At the conference, Helen Plant, who is a senior analyst of grains and oilseeds at the AHDB, gave a run down on UK markets.
The provisional estimate for wheat production is 10.1 million tonnes and even though areas like Scotland saw a record barley crop this year, the increase in barley production will not make up for the decrease in wheat production.
As a result, imported maize looks like it may play a role in replacing some of this wheat.
A price differential of £44/t was reported for September between barley and wheat and this was reported to be the largest monthly average discount to wheat since 1975.
That high-yielding barley crop is also expected to impact on malting barley prices. At present, malting barley usage is uncertain as restrictions come into force due to the Covid-19 pandemic.
However, the gap between wheat and barley is incentivising barley usage, but there is a limit to inclusion rates in compound feed.
Malting barley usage
The coronavirus is impacting on malting barley usage.
In the UK, at the end of August, just over three-quarters of licenced venues were operating, but by the end of September that figure was at just over 80%. Malting barley usage is unlikely to get back to full demand anytime soon as restrictions come back into force across Europe.
The industrial use of wheat in the UK has decreased from 2019 levels and Helen questioned how long the production economics will stack up for when it comes to ethanol production. Maize may be used as an alternative as it is more competitively priced and also has a higher alcohol yield potential than wheat.
The story on milling wheat is more positive, while there were challenges with supply and bagging at the early stages of the pandemic the overall volumes being used have stayed relatively similar to last season.
However, the smaller crop and quality challenges will tighten supplies of milling wheat in the UK this year and imports will be needed.