It is the time of year when new wheat crop opportunities present themselves and bakers can benefit from the adroit use of knowledge of the new harvest to achieve effective cost savings on flour and other cereal prices.
Early estimates indicate a volume of up to 15 million tonnes (mt) for the 2009 crop, which is above previous forecasts, but less than the previous year’s 16.5mt. However, there are high carry-over stocks, estimated to be in the region of 3mt from the 2008 harvest.
Although there have been issues with weather causing problems in certain areas, there are optimistic reports about wheat quality. Indications are that protein levels, bushel weights and Hagberg falling numbers are all presenting millers with good quality milling wheats. In addition, lower moisture levels on crop intake make material handling easier by removing the need for excessive drying. The overall good quality of UK wheat means millers will be able to use higher amounts of home-grown material and avoid high levels of imports, particularly of German wheats.
A discussion with supplying millers will be useful in determining the knowledge of new wheat types and the effort made to maintain and improve quality levels.
The traditional bread-making varieties, such as Hereward and Malacca, remain popular and achieve high-quality standards, producing good consistent flour.
The variety Xi 19 is still offered, although high yielding tends to have lower protein. Solstice is widely used and achieves similar yields to Xi 19, but with higher proteins.
Gallant is a new variety with high yields and has good milling and baking properties. Paragon is a popular spring wheat, also with good breadmaking qualities.
Although millers will be reluctant to reveal details of flour blends and wheat grists, the craft baker can quickly form a view of flour quality by asking about varieties used. Millers who focus on major Group 1 wheat types, as described above, will be able to offer their craft baker customers good-quality flour.
The extended use of Group 2 wheat types will not necessarily detract from good-quality standards, but flour milled from high inclusions of these wheats will not give the same results as Group 1 types.
Group 2 wheats in use currently are: Battalion, Gordale, Einstein, Soissons and Qplus. Meanwhile, Group 3 wheats, which are soft biscuit types, are sometimes used to balance grists.
Group 4 types are hard low-protein wheats, used by some millers to achieve increased mill throughput levels. There may be some quality concerns for the craft baker following the use of these wheats.
After what has been reasonably considered to be a ’good’ harvest, the temptation is to seek drastic reductions in flour prices, particularly if there has been no significant erosion in levels since the price increases, averaging in excess of £154 per tonne, during the autumn of 2007.
Although there may well be opportunities to achieve price savings, it must be borne in mind that the overall harvest volume will be less than previous years when high tonnages and good quality have secured price reductions. It is a matter of balance between wheat volumes, including carry-over stocks, milling performance and by-product recoveries.
The LIFFE price on 25 September was £99 per tonne, having increased from £95.25 at the beginning of the month. Assuming a base price for feed wheat at around £105 and an estimated milling wheat premium of £20 per tonne, with estimated wheat feed returns of £71 to £75 per tonne for August/October, the prospect of lower prices for flour is realistic. This position is of particular interest to the craft bakery sector where price movements may well have been limited to general industry price changes rather than specific contract periods negotiated by larger flour users.
Wheat buyers will no doubt have taken advantage of opportunities to buy forward, benefiting from favourable prices. In addition the timing of by-product sales is crucial in order to achieve the highest possible return. Opportunities to maximise bran and germ sales should also not be missed. There is a view that millers selling by-product through wheat purchasing departments do not necessarily obtain the returns obtained by millers whose by-product is sold by flour sales teams!
l Stephen Bartlett is a former general manager with ADM Milling and sales manager with Carr’s Flour Mills. Tel: 07795 332210; Email: firstname.lastname@example.org