Rank Hovis News

10/09/2009
Rank Hovis Harvest Update September 2009

Overview

This report details 2009 harvest progress along with capturing the latest wheat news from Europe and beyond.

World Picture

There has been steady progress globally with 85% of the worlds harvest now completed. This leaves Argentina and Australia, usually two of the largest growing/exporting wheat nations, still to be harvested. The most notable concern is coming from Canada where late plantings, coupled with poor growing conditions, have led to lower proteins. As a consequence there could be an increase in the quality premiums that are paid in the UK for Canadian wheat.

EU

The outcome of recent wheat price falls has been strong resistance from farmers and grain cooperatives throughout the EU to sell wheat on the spot market. Wheat prices have now fallen below the cost of production, which has led to short term price volatility as farmers have held on to stocks in the hope of a price recovery.

UK

Good weather across the UK has enabled the majority of UK wheat to be harvested with 90% now safely in store. Slightly higher yields, coupled with lower demand, have increased the exportable surplus by 1m tonnes since our last report. The map below details the percentage of Group 1 & 2 wheat’s that have been harvested along with the percentage that are achieving full bread-making specification versus 2008.

2009 National Summary
Full spec group 1	26%
Full spec group 2	14%
	Est. 2009 % Cut	% of 2008 Harvest meeting full spec
		Grp 1	Grp 2
National	85%	6%	3%
Scotland	20%	3%	3%
North	60%	1%	1%
Yorkshire	85%	2%	1%
East Midlands	85%	4%	4%
Wales/West Midlands	70%	2%	1%
East	85%	9%	3%
South East	95%	6%	5%
South West	95%	1%	0%

UK Wheat Harvest Quality Summary

Detailed below are two Venn diagrams detailing the latest results of the Rank Hovis Quality Survey. In what is probably the UK’s largest harvest quality survey, tests are conducted on two million tonnes of wheat and the results analysed by the Rank Hovis Quality Team at its Central Laboratory based in Southampton Mill. This allows Rank Hovis to gain an invaluable insight into wheat quality and therefore how flour will perform in bakeries each harvest.

The outcome to date, of 1 million tonnes tested, reflects an increase year on year in the amount of UK wheat that is achieving the desired specification for bread making purposes. 2008 saw just 6% of Group 1 wheat achieve full specification and therefore bread making premiums in the UK rose to unprecedented levels. This harvest there is a fourfold increase in Group 1 wheat that is making full specification and bread making premiums have returned to around a 3 year average.

Harvest 2008

Harvest 2009

The overall baking performance of Group 1 wheat appears good although measured water absorption is down by over 1% year on year. This, however, does not appear to be impacting on actual bakery yield. Nationally, protein levels have returned to just below the 5 year average although there are some marked regional variations. This harvest Rank Hovis are focused on sourcing the correct wheat variety and quality to ensure that flour consistency is maintained throughout what is a crucial period for bakers and food manufacturers alike.

Summary

• Worldwide harvest now 85% complete
• UK harvest circa 90% complete
• Regional quality variances that require additional focus on flour consistency
• Farmers resistance to lower wheat prices driving short term price volatility

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