Increasing futures for grain, strong demand for distillery by-products and a weaker pound mean that the price of feed is increasing. Feed merchants are predicting a price increase of up to 20% this year.

Farmgate barley prices are up at £115/t to £120/t, approximately £15/t higher than this time last year.

At the time of going to print, the London futures (LIFFE) feed wheat price for November 2017 had risen to £145.25/t, while November 2018 futures stood at £148.50/t. According to the latest figures from the EU crops market observatory, that’s a 25% increase on UK farmgate wheat prices since July 2016.

Merchants say that draff is up £10/t, making barley “look cheap” as a feed constituent. Some are putting this down to demand for distillery by-products from anaerobic digestion plants.

“We’ve been competing for years on the food-versus-fuel debate and it has finally caught up with Scotland,” feed merchant William Davidson said. “The stability offered by Government incentives, like feed in tariffs, mean ADs are here to stay”

Strong domestic demand and lower French crop yields supported grain prices last year. The yield and quality of the 2017 harvest will play a big part over the next few months.

“The weather in the US is putting pressure on the wheat and maize belt,” AHDB market intelligence analyst Millie Askew said. “When the weather is like this, markets cling on to it and tend to be quite bullish.”

This year’s AHDB Planting and Variety survey for Great Britain found that the wheat area planted has decreased by 3% since 2016 to 1.76m ha, while the spring barley area is estimated to have risen by 9% to 725,000ha.