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Cereals farms in the UK >
How cereals are used >
Performance of the cereals industry >
Cereal farms in the UK
The number of cereals farms in the UK has been falling and now stands at less than 56,000. About 50% of the area under production is accounted for by 13% of farms indicating that production is highly concentrated in a small number of farms.
The area planted to cereals has been falling in the UK and so has production. The details are shown in the table below:
|
|
'96-'98 |
2003 |
2004 |
2005 |
2006 |
2007 (prov.) |
|
Area
('000 ha) |
3430 |
3056 |
3130 |
2919 |
2860 |
2872 |
|
Volume |
23630 |
21494 |
22005 |
21012 |
20826 |
19048 |
Source: Defra
Yields are highly dependent on the weather.
Cereal prices have been strong throughout 2007 but there was a sharp increase in prices in August with prices peaking in September. During 2008 prices have fallen back.
Prices are likely to remain high reflecting prices on world markets. This can be attributed to various factors including increased global demand for food, feed and fuel use, low world stock levels, export restrictions introduced by a number of the large grain exporting countries, concerns about adverse weather conditions affecting production in Europe and elsewhere including the drought in Australia as well as lower domestic production and domestic quality concerns.
The area planted to cereals in 2008 in the UK increased but poor harvesting conditions will adversely impact on quality and volume.
The main crops grown in the UK are wheat, barley and oats.
How cereals are used
Cereals are not generally thought of directly as "food products".
Apart from breakfast cereals (which also undergo processing) their common usage is as raw materials like flour and malt.
Consumer demands for cereals are expressed through products like bread, cakes, beer and spirits for example. These value-added products require further processing of intermediate products.
Lower quality cereal production is also used as animal feed.
Performance of the cereals industry
Over the past few years the cereals industry has been involved in one of the most far-reaching initiatives it has ever undertaken.
The Cereals Industry Forum (CIF), led by HGCA and IGD’s Food Chain Centre, has involved all parts of the industry and was supported by the National Farmers' Union, the National Farmers' Union of Scotland, National Association of British and Irish Millers, Agricultural Industries Confederation (AIC), the Maltsters Association of Great Britain, the Institute and Guild of Brewing, the Federation of Bakers, the British Society for Plant Breeders, the British Beer and Pub Association, and the Scotch Whisky Association.
Historically, cereal farmers have had little visibility of market needs and future trends. Further, competition in the industry has always centred on short-term profits and spot-market prices.
One of the key findings from the CIF has been the identification of the following improvement opportunities:
- Transport and delivery: overall efficiency and effectiveness of transport as well as loading and tipping of grain can be improved.
- Storage and inventory: although the amount of inventory in the overall chain is seasonal, the conditions and stages at which the grain is stored can be optimised.
- Quality and inspection: considerable waste was found due to multiple sampling and testing.
- Information and communication: information is not always visible across the chain, affecting effectiveness. There is, also, a general lack of communication along the chain.
- Relationship and trust: in some of the cases relationships are distant and lack of trust between parties remains an issue.
- Production and planning: through better communication and collaboration, there are opportunities for improving planning and production.
- Cost and price: the constant focus on price gets on the way of collaboration. Industry wide solutions such as cost benchmarks might be appropriate.
- De-commoditisation: the industry as a whole is under pressure from intense price competition. There is a need for higher value products and win-win value enhancement solutions whereupon the industry players can differentiate their supply chain away from commodity pricing.
- Retail Availability: improving on shelf availability of products that comprise cereals as an ingredient.
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