From mankind’s first food source to a potential new fuel, it’s no surprise wheat is the biggest commercial crop in the world. Strutt & Parker explores its past, present and future.

It’s no wonder wheat was among the first staples of the human diet. It’s a versatile and hardy crop, able to grow in various weather conditions.

But it’s the UK where wheat really thrives – our regular rainfall and temperate climate have produced record yields in recent years. And it’s not just volume – Britain is also world-renowned for the high quality of its wheat.

A very big year

Wheat is big news this year with National Farmers’ Union figures showing a 6% year-on-year wheat yield rise, from 8.6 to 9.1 tonnes per hectare.

UK total wheat production is estimated to be around 16.68 million tonnes for 2015, beating last year’s figure of 16.61 million tonnes. This is the first time ever wheat grown in the UK has exceeded 16 million tonnes two years running.

These record results also come at a time when there is actually a reported decrease in the amount of wheat planted, as farmers adopt crop rotation methods to tackle problematic weeds like black-grass.

But are these record-breaking yields good news for everyone?

While it means cheaper prices for consumers, it will only add to the concerns of growers of increased pressure on the market. When supply increases, prices drop for both producers and consumers.

Why we grow wheat

One of the most common crops across the globe, wheat benefits from its versatility.

Milling wheat - which is ground down for flour – is the most popular form, used in foodstuffs from bread to biscuits. It’s especially popular in the UK where we produce high quality milling wheat. In fact it’s so good, that 80% of wheat used by UK millers is actually from Britain – twice as much as was used in the 1970s.

This is good news, as farmers now have a market for their wheat and millers don’t have to pay haulage or import costs.

One of the reasons it’s such a popular crop in the UK is that it can be sown twice a year – in autumn and spring. Both are then harvested in August. Most UK farmers opt to sow in autumn, allowing the crop to grow through winter. This tends to produce higher yields than the spring crop and allows farmers to spot and remove any early growing black-grass.

It’s not just flour wheat is used for. It can be used in:

• Animal feed: around 40% of wheat goes back into the farm in this manner. Some is kept aside as a seed crop for the following year.

• Glucose: Wheat has recently diversified further with food and drinks manufacturers using it to create starch and glucose.

• Bioethanol: This plant-based ethanol can be used as a petrol alternative. It uses wheat straw, which has low commercial value. Still in the early days of development, it is expensive to produce, so unless crude oil prices go through the roof it remains commercially unviable for the majority.

Why is wheat so important?

The value of the cereals sector in the UK has more than doubled in the past five years to nearly £3.5billion. A big part of that – around £2.4bn – is from wheat. That’s nearly a quarter of the total contribution farming makes to the UK economy.

And while the majority of our wheat stays in the UK, it is part of a global market. With great yields across the globe, there has been an increase in its supply. And with increased supply comes a drop in price.

There have been reports of wheat prices dropping 30% over the past two years, with the cost of production staying steady. Many growers in the UK face the prospect of grain prices failing to cover the cost of production - costs that are rising as diseases and weeds become more difficult and expensive to tackle.

With forward prices for next harvest also below the cost of production, some farmers could see no profit from these crops for three consecutive seasons.

The one thing saving the UK is the high quality of the wheat. While it won’t offset the drop in prices, it does offer a vital buffer.