Farmers like Mills have managed to find alternative buyers, but at a cost.
“We’ve had to find other intakes,” he said. “Whereas before we could produce [wheat] for ethanol and animal feed, it’s now just going solely for animal feed. And because there’s more wheat available in the U.K., prices are depressed. Our ability to make a profit has been drastically impacted.”
Further north, the impact has been even more stark. In September last year, when the Ensus plant was mothballed, the loss of domestic bioethanol demand effectively knocked around £8 to £10 per ton off local wheat prices.
Brett Askew, an arable farmer outside Newcastle who supplies the plant, said the closure wiped around £25,000 off his bottom line this season. “That’s a whole wage,” he said. “We barely cover our costs.”
Government support
Earlier this year, as the Iran war sparked fears of a carbon dioxide shortage, the U.K. government swooped in with a £100 million support package to temporarily restart production at Ensus — a key domestic source of the gas, which is essential to industries from food and drink to healthcare.
Local wheat prices have since recovered somewhat, but Askew said the rebound only underlined the fragility of the market.