Phil Garnham JP Trett Divisional Manager Grain, Feed and Seed
  • Phil Garnham JP Trett Divisional Manager Grain, Feed and Seed
    Phil Garnham JP Trett Divisional Manager Grain, Feed and Seed

Brexit is starving the UK’s successful grain trade of oxygen and direction:

Back in the summer of 2016, there seemed to be little to worry about.

It had been a reasonable spring and we were headed towards a sensible looking harvest.

The skies were blue, the sun shone and the word ‘Brexit’ was just a funny misnomer that had been borne out by the tabloids.

Fast forward to January 2019.

Since the spring of 2017, the grain markets have reached an impasse. First, it happened on the European markets – noticeable predominantly in the malting barley industry.

Our continental cousins in Germany and beyond wanted to buy, but they needed to know what tariffs they’d need to take into account.

Selling

And the UK would need to know what terms they would be selling on.

Ultimately, no knew what they were buying or selling against.

And so the trade has become less and less, with no clear direction being seen from either Number 10 or the EU.

You might argue ‘what’s this got to do with me, I grow feed wheat in Leicestershire!’

Well, the UK has been and will be a net exporter of grain to make sure we can remove our exportable surplus.

If we don’t have a market for our grain, then it can’t be sold. If it can’t be sold, your grain loses value.

Dominant

And don’t argue about the relationship between sterling and the euro. While it does come into play, it’s not the dominant factor here.

The UK has been sleepwalking for two years and failed to give any thought to the implications of what a deal or no deal means in our industry, but worryingly, the noises coming out of Downing Street have been to make deals with the USA, and their chlorinated chicken.

The UK grain trade is the pinnacle of European trading, but right now it feels like it’s being starved of oxygen and direction.

Look at those forward markets boys and girls, because there’s no guarantee there will be buyers.

Phil@jptrett.com