If rain doesn't fall in the next two weeks, wheat yields will suffer, Birch said. Irrigating crops isn't an option because the farm can only draw a set amount of water from reservoirs, and most of those sources are dry, he said.
"Even if we could take out more, the water table is dropping because of the drought," Birch said. "The reservoirs and little streams have all dried up. I've found in Dorset, we're probably not as badly off. If you speak to farmers in Norfolk, you'll hear a worse story on winter crops. They're just hanging in there."
Light rain is forecast in northern Europe in the next 72 hours while next week will be dry, agriculture forecaster Telvent DTN said in a report today. The U.K. is the EU's third- biggest wheat producer after France and Germany, according to the International Grains Council. The U.K. crop in the year through July 1 was 15.1 million tons, or 11 percent of EU output, IGC data show.
Milk Production
While rising prices for grains may offset losses caused by dry weather, Birch's farm is also paying more to feed its 500 dairy cows.
"Our biggest single cost for the milk production is the feed," he said. "We haven't yet seen a sufficiently big increase in the price we get for milk. Our margins have been squeezed."
Birch still prefers those worries to the ones he dealt with in his days as a stock picker.
"The stress as a fund manager was relentless," Birch said. "Every day you have to beat the stock market again. With farming, it's physical challenges and practical challenges."