Suffolk farmers shocked as cereal prices hit new heights

Prices have climbed to staggering new heights as Russian troops advance deeper into Ukraine - one of the world's main breadbaskets - throwing world markets into turmoil.

Around 200 members of Suffolk Show organisers the Suffolk Agricultural Association and farmers' co-operative Fram Farmers gathered at Trinity Park in Ipswich for the Suffolk Farming Conference on Thursday (March 3).

It was their first major get-together since the pandemic but there was a sombre mood as they held a minute's silence for war-torn Ukraine.

Meanwhile, outside the hall, the continental conflict sent prices rocketing to an eye-watering £259/t for feed wheat and £295/t for best milling wheat. Last year, feed wheat was around £149/t . Oilseed rape reached £660/t compared to £300/t in 2020.

But while the prices should have brought cheer, they have been accompanied by huge volatility - and massive hikes in oil, gas, fertiliser and other input prices - not to mention animal feed and farm machinery.

These could prove a lethal cocktail for certain types of growers, and farmers in the hall were anxious about the future. At the same time, farmers at the conference were deeply concerned about the deteriorating situation in Eastern Europe and the plight of Ukraine.

"We have never seen the market fluctuate as it has," said arable farmer James Nunn of Stowupland. "It's never this erratic."

As well as huge volatility in the market, UK farmers face a major post-Brexit shake-up which means they will no longer be subsidised for growing food. The old European Union Common Agricultural Policy (CAP) system has made the difference between breaking even and plunging into the red for many UK farm businesses - and made up about half of farmers' incomes in many cases.

A number of farmers - such as vegetable growers - fear that CAP's UK successor involving payments for environmental work on farms could be placed beyond their reach for a variety of reasons.

"About six years ago we sold some wheat for £221/t. That was biscuit wheat for about three weeks. You are looking at nearly £40 higher for a basic feed wheat - it's never been at this level," said James.

"I'm getting emails and text messages and looking at apps and trying to make senses of something that's incredibly volatile. There was a lot of uncertainty before the Russian invasion of Ukraine and that's only exacerbated it."

His neighbour, Robert Porch of Earl Stonham - who has been farming for 37 years - said the whole situation was a shock.

"I sold wheat last year for £149/t so it's just a huge difference.," he said. "It's always difficult to know what to do. Every week you try and sell and the wheat price has gone up £10 the next day."

Suffolk Farming Conference, an event organised by Suffolk Agricultural Association and farming co-op Fram Farmers for their members. L-R Phillip Ainsworth, Andrew Knowles, David Barker (Image: Archant)

But with input prices now exceedingly high - red tractor diesel was 17/18p towards the start of the pandemic and has risen to highs of 82p/litre and fertiliser prices quoted at £650/t two days ago compared to £182/t in 2020 - they will need every penny to stay afloat, the farmers warned.

"I feel bad benefiting from other people's hardships - especially from the Ukraine situation - but we have to do the best we can to combat these very high input prices," said James. "You don't want to be profiting about issues happening in other countries - especially watching the Ukraine people suffer."

"We are all trying to look ahead and diversify. I have got confidence for the next couple of years but beyond that, who knows?" added Robert. "Could it escalate? I can see an impact for the next two or three years there. It's worrying. We are reluctantly smiling about those huge increases in (crop) prices, but it's a huge concern for us."

And internationally, the weather picture isn't looking rosy for other global breadbaskets, the conference heard. North and South America are both experiencing difficult drought and other climate issues which could hit yields at a critical moment in global politics, delegates were told.