Market forces have created an unusual situation where the 2015 feed wheat crop is worth more than the 2014 crop, adding incentive for farmers to hold onto stocks in store.

The large wheat crop of 2014, in combination with additional market factors, has led to the current price differential.

Jack Watts, AHDB Lead Analyst, said: “The November 2015 feed wheat futures have recently reached a £10/t premium over the May 2015 spot price. Usually, the new crop price is at a discount to the spot price.

“The closest comparable situation was last seen in 2008/09, which was also driven by a record UK wheat crop.”

Current market conditions are creating an economic incentive for farmers and commercial store keepers to keep feed wheat in store and sell into the next marketing season, rather than clearing stores ahead of the harvest.

Whether individual businesses decide to hold onto the 2014 crop largely depends on two critical factors:

1. Cash flow – Stored grain ties up working capital that a business may need to release in order to fund the growing of the 2015 crop.

2. Storage constraints – Stored grain requires continued management and can cause logistical issues at harvest to ensure old and new crops are segregated.

Mr Watts continued, “Those with grain to sell are advised to devise a plan which includes both storage and cash flow management to put them in a strong position to get the most out of this current market opportunity.”

In relation to managing stores, AHDB is urging growers to follow its guidance on grain storage and sampling.

Dr Dhan Bhandari, HGCA Research Manager, said: “Investment in stored grain started with store preparation last year and store maintenance activities over the winter months.

“Those with stored grain can now maintain quality for the feed wheat market, if they continue to closely monitor grain temperatures, moisture contents and pest pressures, and manage any issues before they spread.

“It may also be prudent to consider getting grain tested for ochratoxin A, germinative capacity and pests.”

AHDB is also reminding storekeepers of the valuable information contained in the 2013 Grain sampling guide, which details how to take and retain samples from each lorry load before it leaves the store.

To access the full range of grain storage resources, including ‘checklists’ designed to help sellers avoid the most common problems associated with sales contracts, visit www.hgca.com/grainstorage