The one question on many poultry producer’s mind is “would wheat prices ease in 2008?”

To answer this, Home Grown Cereals Authority expert Jack Watts outlined the complexities of the current feed grain market at a recent meeting of the East Midland poultry discussion group.

How does the depth of the current situation compare with previous feed price crises?

From a UK point of view this is one of the most significant pricing seasons since we joined the EU and this has been reflected in the record breaking prices.

It must be noted that on a global scale this is a wheat issue. As the majority of the world uses maize as the predominant feed grain the impact was lesser. The UK feed situation stands out more because of it’s reliance on wheat.

What sort of response could there be in 2008?

As a result of the strong forward prices, the world is expecting to see a wheat supply response. The International Grains Council estimate the world wheat area will be 3% (6m ha) higher in 2008 at 220m ha. Planting conditions have been favourable across most of the northern hemisphere, which may encourage more of a supply response from arable growers.

However with wheat almost twice the price of maize, we may well see a reduction in maize in favour of wheat.

How will growers respond to 0% set-aside?

Early evidence suggests that around half of set-aside will come back into production. This could equate to up to 2.5M t extra wheat in 2008. But there could be pressure from environmental groups who have been lobbying government to restrict set-aside at a UK level.