UK Wheat: A North/South Divide Is Opening Up

The NFU's estimate of a English wheat crop of 13.5 MMT this year has got me thinking. Where is this stuff grown, and where is it all going?

Less than a quarter of last season's UK wheat crop was grown north of the M62, with Scotland, the North East, North West and Yorks/Humber regions producing 3.45 MMT of the UK's 14.4 MMT output.

Based on my calculations though, these regions accounted for 44% of UK wheat consumption in 2009/10, and that is only factoring in 300,000 MT of UK wheat going into bioethanol production.

Scotland, the North East and the North West are already wheat deficient. By the 2011/12 season with Vivergo in operation, even if it only operates at 50% of capacity, the Yorks/Humber region is also set to consume more wheat than it produces.

If Vivergo and Ensus were to run at full capacity in 2012/13 then the north of England would be something like 4.6 MMT wheat deficient based on current production rates. That's more than double what the region currently produces.

By then only three regions in the UK will produce more wheat than they consume: the West Midlands, the South West/Wales and the South East. That's not good news if you are a northern wheat consumer, but it's pretty damn sexy if you grow the stuff.

Of course we may have another player in the market by 2013: Vireol's GBP200 million Grimsby facility (that is unless the length of time taken to build their "exciting new website" directly correlates to how long the plant will take to construct).

By 2013 the average northern wheat grower could see his crop being fought over like the video for Frankie Goes To Hollywood's "Two Tribes" - except there will be three of them in the ring.