Lacklustre wheat markets leave margins tight for UK growers

UK feed wheat fell below £170/t ex-farm in mid-March, leaving little incentive for growers to sell and margins reasonably tight on farm.

May 2025 feed wheat futures opened at £175/t on 19 March, down by £18/t since the start of the year.

In contrast, new crop has been trading roughly £17/t ahead of old-crop wheat, with the November 2025 contract standing at £192/t midweek.

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Meanwhile, milling wheat continues to struggle and sits almost £40/t below last year’s levels at £191/t.

Consultants at Andersons say large volumes of imported milling wheat have reduced its premium over feed wheat from £60/t earlier in the season to roughly £25/t.

This is supported by HMRC figures, which show that wheat imports coming into the UK were up by 55% on the year during the first half of the 2024-25 crop year, totalling 1.96m tonnes.

James Wright, commercial director at flour millers Wrights, said old crop milling wheat premiums continue to face downward pressure.

“With significant volumes of old-crop wheat remaining unsold, some farmers have chosen to hold onto their stocks, anticipating better market conditions,” he explained. 

“Currently, new-crop milling wheat premiums are about £9/t above the May 2025 premium.

“Given the existing oversupply, there remains the potential for further declines in these old-crop wheat prices.”

Wheat prospects

UK wheat production is forecast by industry anywhere between 12.5-13.3m tonnes for 2025, and favourable weather conditions in recent weeks have helped crops in the ground progress.

Despite this uptick in volume on the previous year, margins for growers are still likely to remain tight, with relatively low farmgate prices, increasing fertiliser costs, and concerns over the future of funding through the Sustainable Farming Incentive.

This will add further pressure to businesses that are still recovering from a poor 2024 harvest.

Defra farm business income figures, which represent the financial return to all unpaid labour and on all their capital invested in the farm business, including land and buildings, predict income on cereal farms to drop by almost one-third to £27,000 for the March 2024 to February 2025 period.

Market drivers

The US Department of Agriculture’s World Agricultural Supply and Demand Estimates report for March indicated larger global wheat stocks, with greater production volumes anticipated in the US, Australia, Argentina and Ukraine. This has kept global markets relatively bearish in the past week.

However, there have been some more positive market drivers, with analysts Strategie Grains and European trade association Coceral both reducing EU wheat crop estimates for 2025.

Strategie Grains forecast EU soft-wheat production at 113.5m tonnes, while Coceral put the EU and UK combined soft-wheat crop at 137.2m tonnes for 2024-25.

Traders at ADM say the EU’s 25% tariff on US imports could impact trade flows and influence long-term wheat demand.