UK cereals surplus double the five year average

The first 2015/16 UK supply and demand cereal estimates by Defra identified a drop in human and industrial usage, as well as for animal feed. Despite a forecast reduction in total cereal imports, the surplus available for either export or free stock is almost double the five-year average.

Defra’s first official UK cereals balance sheet for 2015/16 was published on Wednesday (25 November). These estimates build on the early insight provided for wheat and barley by the AHDB Early Balance Sheet in mid-October, as well as providing the first outlook on the 2015/16 supply and demand situation for maize and oats.

The balance sheets take account of the latest Defra crop production and cereals statistics, as well as up to date industry intelligence.

Dip in human & industrial demand

The latest forecasts suggest that human and industrial (H&I) demand for cereals in 2015/16 will decline by 7%, compared with last year. While we’re expecting reductions in the demand for H&I use of wheat, barley and maize, the opposite is true for oats – more on this later.

The final AHDB Cereals & Oilseeds Cereal Quality Survey results revealed that average GB wheat specific weights for this year’s harvest were the highest since 2011. Bigger grains suggest an improved extraction rate for the flour milling industry.

Early usage data and anecdotal evidence indicate that we’re unlikely to see growth in flour production this year. Consequently, it is assumed that less wheat will need to be milled in order to achieve a similar level of flour production to last year.