New feed bean contract offers growers hefty premium
© Tim Scrivener Arable growers looking to market their breakcrop of beans have another option this season after Frontier Agriculture launched a new contract to meet rising demand from the commercial fish food sector.
Frontier, the UK’s largest grain marketing and agronomy business, is offering a base price of £35/t over the November 2019 wheat futures price, with an additional £10/t available if growers agree to follow the company’s agronomy protocol.
The latter requires growers to agree to crops being walked by a Frontier agronomist, as well as applying two biostimulant products, and is available even if the grower is not an existing Frontier customer.
See also: Strong export demand causes surge in feed bean price
Feed bean quality and bruchid beetle-damaged crops are acceptable for the aquaculture market, which requires 100,000-150,000t annually for end users in Scotland and Norway.
However, if bean quality meets the specification for human consumption, growers will retain the right to trade their beans in the higher-value export market.
Premium value
At the current November-19 wheat futures price (28 Jan) of £153.55 plus both premiums that would make a tonne of beans worth £198.55/t, with the base price able to be fixed at any time before the 15th of the month prior to movement.
Feed beans are currently trading on the open market at a multi-year high of £230/t as suppliers struggle to meet strong export demand with scarce supplies from harvest 2018.
Supplies are likely to be less scarce next season if growing conditions revert to closer to normal, but the AHDB Early Bird Survey of planting intentions forecasts that the overall pulse area to fall by 8% to 183,000ha.
Frontier is in the process of building a new bean processing plant at its existing site in Nottingham to create the fish food product, which requires the beans to be dehulled to create a product with a protein content approaching 30%.
Nick Heald, Frontier commercial director, said: “We are making a significant investment to open up this market for farmers and there are potential benefits to the whole supply chain.
“For growers, beans are attractive agronomically as they offer an opportunity to widen the rotation, spread risk and increase gross margins across the rotation.”
Wheat futures losing value over big crop expectations
Market analysts are forecasting the wheat price to fall in 2019 as plantings are up on the previous year, but much will depend on how the weather plays out through spring and summer both in the UK and globally.
The November 2019 price has fallen by about £9/t since the beginning of the year and is back from a peak of just shy of £175/t in mid-July.
French agricultural consultants Stratégie Grains are forecasting an EU-wide wheat crop of 146.4m tonnes, a 15% increase on the year.
Less data is available for the UK specifically, but the final AHDB Early Bird Survey results, released on 21 December, pointed to a 4% increased wheat crop area of 1.87m ha.