Fasten Your Seatbelts, We're Going Back Up

Remember 2007? Feed wheat at £200/tonne? The good times are about to roll again my friends.

Well, at least according to Savills Rural Research's latest "Wheat Price Outlook" they are, here's what they've got to say:

“While any future large movements in price will depend upon the estimates for the 2009 harvest, which will be influenced by the usual factors of planting, frost and drought, ultimately it is a difference in annual crop yield that has the greatest influence on price.

“We expect global production to fall next year, and on current consumption figures a reduction in world stocks. The forecast is based on the probability of weather conditions being less favourable and crop input applications reducing as higher input prices change the financial optimum and credit restraints limit purchasing power.

“This fall in world stocks should lead to a rise in prices, potentially back to the highs seen following the 2007 harvest.”

Blimey! Will we ever see feed wheat at £200/tonne again? I think we will, but I don't see it being in 2009 if plantings are only down 2-3% as all the leading authorities seem to think. No matter what the weather throws at us. 2010/2011 however could be a different story, once the world is hopefully back on it's feet.