Growing interest in UK cereals industry

In 2008 the UK farmers grew £3.18 billion worth of cereals in total.

UK cereal farmers had a record yield year in 2008, producing 24 million tonnes of grain, including a record 17 million tonnes of wheat (up over 30 per cent on the previous year).

HGCA is the body established to improve the production and marketing of cereals and oilseeds grown in the UK, and it regularly organises international cereals missions to highlight the quality of British wheat.

It also holds events such as bread-making workshops where importers can sample UK wheat and make their own local speciality breads from it, thus demonstrating its versatility. Currently, one quarter of all wheat and barley production in the UK is exported to 40 countries.

David Eudall is an analyst from HGCA. He says: “The fact is that, in a good year, the UK is producing good quality wheat that importers want. We’ve had buyers from European and North African countries recognise the quality of wheat we produce and, seeing the infrastructure and machinery we have, understand how we produce it. In the UK, we have the growing conditions, technique and knowledge to produce a quality product.”

This hasn’t gone unnoticed by leading global agribusinesses and food producers. One of the biggest investors in the UK cereals industry is Cargill, the US-headquartered international producer and marketer of food, agricultural, financial and industrial products and services.

In 2008, Cargill’s new wheat-processing plant at Trafford Park, Manchester, was officially opened. Cargill invested £75million in the plant to convert it from processing imported maize to domestic wheat. It now processes 750,000 tonnes of wheat per annum to provide a range of products for the food industry, baking industry sector and dairy sector.

US-headquartered global operator Archer Daniels Midland, is the largest independent flour miller in the UK, operating eight flour mills across England and Scotland through its subsidiary ADM Milling.

This operation serves customers ranging from large, multinational manufacturers to small craft bakers; and, through its ADM Direct programme, UK wheat farmers can build a mutually beneficial business partnership with ADM to sell wheat (and rapeseed) directly to the processor.

Wheat market

Then there is German company Bayer, which has three CropScience production units in the UK – at Cambridge, Norwich and Widnes - dedicated to developing, manufacturing and marketing solutions for the protection of crops.

Swiss-headquartered Syngenta, meanwhile, is a world-leading agribusiness “committed to sustainable agriculture through innovative research and technology” and its UK operation is based in Guilford and Cambridge.

In wheat, Syngenta’s investment in the UK - including investment in the company’s Cambridgeshire-based plant breeding facilities – has recently seen the company make a comeback in the UK market; and, in June, The National Institute of Agricultural Botany awarded its Cereals Cup to Syngenta’s malting spring barley variety, Quench.

Robert Hiles, Global Malting Barley Business Manager for Syngenta Seeds, says Quench, a variety used in beer-making, isn’t just popular in the UK: it is also enjoying considerable success across Europe – including Germany, Ireland, Spain, Denmark, Holland, Sweden, Austria, Poland and Hungary and is even being tested as far away as Australia, New Zealand, Kenya and China.

Cereals and oilseeds can be used in a wide range of applications, however, including the production of biodegradable packaging and biofuels. With this in mind, the Ensus Group - owned by two U.S. private equity funds, the Carlyle Group and Riverstone - is building Europe's largest bio-ethanol plant and wheat refinery at Wilton International in Redcar, Teeside.

The plant will produce over four million litres of bio-ethanol fermented from wheat grain and, as the UK's first world scale production facility, will reduce the country's reliance on imported alternative fuel.

It will also produce about 350 thousand tonnes of high protein wheat derivative for use in animal feed, and the CO2 generated will be captured and used primarily in the food industry and also for plant growing.

The plant brings with it an investment of £250 million and 100 permanent jobs. Ensus’ global partners in the project include Shell, Norwegian company Yara - one of the main players in the European CO2 market – US company Katzen and Swiss-headquartered company Glencore, who will supply grain to Ensus in the UK.

The majority of wheat used in the plant will be sourced directly from within the UK, because the type of wheat required for the process is a soft, high starch, low protein wheat which is widely grown in Northern England.