Industry changes reflected in January usage stats

Human and industrial usage

The latest cereal usage statistics were published today and show usage across all sectors for January 2021. The values published are not directly comparable with figures from January 2020. This is due to January 2020 being a five-week statistical month, whilst January 2021 is only a four-week month.

On a pro-rata basis usage of cereals in the Human and Industrial (H&I) sector remained down in January. This is owing to the continued lockdown measures, and the large volume of trade completed pre-EU exit, particularly in flour.

Usage of imported wheat by flour millers was up once more in January. This takes the season-to-date (Jul-Jan) total to 877.6Kt, 70Kt more than at the same point in 2012/13.

Due to the changing shape of the UK grain industry, it is not possible to produce a separate statistic for “other flour” or “cake flour”, although these numbers are still included in the total flour figure. This is driven by a change in the number of businesses in the survey, following the closure of the Roquette plant at Corby at the end of 2020.

‘Other flour’ represents the starch, glycerine and bioethanol sectors. Wheat usage in the sector has reduced considerably over the course of this season. While it is unavoidable, not having this data limits the transparency into these areas of the market.

Wheat usage in the sector is expected to recover next season, particularly with Vivergo due to come back online in early 2022.

Barley used by brewers, maltsters and distillers was down 13% year-on-year in January. That said, if we convert January 2020 to a four week month, usage increases year-on-year in January, by 9%.

GB animal feed

The GB animal feed production statistics were also published this morning. As with the H&I data, a direct comparison between the statistics for January 2021 and January 2020 is not possible. That said, it is no surprise to see that pro-rata usage of wheat is down and barley up, following the trend observed over the course of this season.

Season-to-date (Jul-Jan) usage of barley is up 31.9% on 2019/20, at 915.6Kt. Meanwhile, usage of wheat is down 18.1%, at 1,797.3Kt, in the season to January.

In January the discount of ex-farm barley to ex-farm feed wheat hit £50.92/t (spot). The five-year average discount is just £14.34/t. This increased the incentive to include barley in rations.

Looking at the different livestock categories, production of pig feed in the season to date is up 4.5%, at 1,224.5Kt. This is no great surprise given the back-log in pigs going for slaughter at present. Cattle and calf feed is also seen up in the season to January, increasing by 2.4% to 2,453.6Kt.

For poultry, season-to-date feed production is reportedly down 5.6% year-on-year. Furthermore, if we adjust broiler feed production (compound and integrated poultry units) in January 2020 to a four-week month, then the production of broiler feed in January was down 0.9% year-on-year.

This fall in production comes in spite of a 6% rise in GB broiler placings on January 2020. If we pro-rata January 2020 broiler placings to a four-week month, then placings are up 33% year-on-year. This an area that we need to pay close attention to as it is a key centre for cereal usage.

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