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Bright future for barley after challenging year

Indications are that demand for barley is strengthening at a national and international level with this spring’s delayed planting also acting to firm new crop prices.


Marianne   Curtis

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Marianne   Curtis
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New crop malting barley premiums have risen by £5-£7 per tonne during March to give a malting barley price comfortably above £150/t for November delivery amid fears of getting the crop sown in a timely manner due to recent adverse weather conditions.

 

Glencore malting barley trader Tom Eaton says only 20-30 per cent of the planned UK spring malting barley area has been planted so far. “This ranges greatly from the heavy lands to the light lands - on the heavy lands they have not been able to get on. Buyers have taken some cover but farmers have not wanted to engage in selling as they don’t have the confidence they will get the crop planted and established in a timely manner.”

 

Spring barley plantings are expected to be up seven per cent this year, says Mr Eaton. “If it all gets planted and growing conditions are favourable the premium will come back down but if not, it will find support.”

 

Major malting barley growers, France and Germany are also about two weeks behind with barley plantings, due to the weather.

 

Meanwhile, old crop malting barley prices have strengthened on the back of a tight supply situation and the new crop planting delays, says Mr Eaton. “There is interest in old crop of a known quality.”

 

Any old crop malting barley with a maximum of 1.85N is currently trading at a reasonable premium of around £25/t over feed,” he says.


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Export activity

 

Elved Phillips, head of UK malting barley exports at Openfield, says there has been a lot more malting barley export activity that he thought he would see, given the difficult growing season and harvest in 2017. “I’ve never seen a worse growing season for spring malting barley, coupled with a difficult harvest. We’ve done remarkably well to ship what we’ve shipped.”

 

The UK normally exports 350,000-400,000 tonnes/annum, mainly to Germany. “I suspect we might do 200,000 tonnes – as a business we do half of it. It has been very hard going and our customers on the continent have had to be very understanding about quality.”

 

The main problems have been high Ns, pre-germination, discoloured, cracked and split grains. However, Openfield’s central store network, with drying and grain processing facilities superior to those normally found on farm, was a bonus, allowing more barley to be salvaged for malting than would otherwise have been the case, says Mr Phillips.

 

“The one thing a lot did have was very good grain size. Careful blending enabled N specifications to be met and quickly drying to 14 per cent moisture arrested pre-germination. The central stores really earned their money. The same barley on farm would automatically have gone for feed.”

 

Prices for malting barley peaked just after harvest 2017 when farmers were achieving £160-£165/tonne, says Mr Phillips. “Since Christmas, Denmark – a late planter and seller - has come into the market, reducing the export price to around £150/t.”

 

Looking ahead, Mr Phillips is bullish about Brexit. “We are looking after our continental customers who are desperate to have our UK malting barley and this will go on after Brexit.”

Feed barley prospects

 

Farmers with feed barley still to sell have seen strengthening demand, with prices currently topping £135/t ex-farm, says Mr Phillips. “There is a huge trade into the South West and North West for the pig market. Also wheat and barley are at record inclusion rates in compound feed.”

 

Food waste which used to supply pig farms is now finding a home in anaerobic digesters, helping to boost demand for wheat and barley in pig feed to substitute this loss, and there has also been demand for UK feed barley from Spain and Ireland, he adds.

 

“This year the world has used more barley than it has produced which is a good news story for barley growers. It is also inelastic demand – pigs and camels specifically need barley.”

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