The future’s bright for the Miscanthus market

By Alex Robinson 19th September 2014

Arable farmers often come to Terravesta asking: “What is the current market for Miscanthus, and what does the future look like?” It’s a good question, and one that any business-savvy farmer needs to know the answer to. After all, those who have traditionally grown other cereals, such as wheat, oats and barley, know exactly who buys the crop they produce – and, most importantly, that there will always be a demand for it. The good news is, Miscanthus is no different.

Not only is there already a huge market for the crop as a UK-grown biomass resource (with demand still far outstripping supply) – but this demand will only continue to grow as we move away from fossil fuels and gravitate towards more sustainable alternatives.

Large-scale power generation remains the main market for Miscanthus, and Terravesta’s contracts with major biomass-fuelled energy producers like Drax mean there is a guaranteed market for all the crop farmers produce – so if you can grow it, we will buy it. Thanks to the ongoing support of schemes like the government’s Renewable Heat Incentive (RHI), widespread demand for energy crops as a sustainable, own-use heat and power source is also continuing to increase. Outside of the energy mix, Miscanthus is also used as a raw material for a number of different purposes in the wider marketplace.

Of course, this surging demand for Miscanthus would be nothing if it weren’t backed by consistent, reliable profits for the farmers who grow it – and that’s where Terravesta’s 10-year, index-linked growing contracts come in. Contracted growers can rest assured that Miscanthus prices will only continue to improve year on year – something that certainly can’t be said for volatile cereals prices.

Wheat prices, for instance, are renowned for their tendency to vary, making it almost impossible to forecast and depend on a steady, reliable income. Miscanthus, in comparison, offers net margins over 15 years that are head and shoulders above those of its arable competitors (as this graph shows) – even taking into account a typical two-year establishment period. You can also make your own comparisons by using our new Miscanthus calculator.

In the unpredictable world of farming, the confidence and peace of mind that this level of financial security brings is a true rarity – and for an already-flourishing market built on such strong foundations, the only way is up.

To find out more about any aspect of profitable Miscanthus growing, join us at one of our autumn farm walks or get in touch to talk to a Terravesta expert today.

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