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Strong prospects for UK malting barley exports

With spring barley yield and quality issues being experienced in some areas, the prospects for those with good malting barley harvest look bright, particularly as the Northern European crop is under par.

 

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Defra has released its Farming Statistics, which show a nearly 8 per cent fall in spring barley production.

 

Winter and spring barley both saw lower levels of production in 2018. A 7.7 per cent drop in the production of spring barley in 2018 to 3.9 million tonnes, in spite of a small 1.1 per cent increase in the area, was caused by an 8.7 per cent fall in the spring barley yield from 5.6t/ha (2017) to 5.1t/ha in harvest 2018.

 

Winter barley production dropped by 8 per cent to 2.7mt in 2018; this is mostly explained by a fall in the winter barley area of 6.7 per cent to 394,000ha, as well as a slightly lower yield of 6.9t/ha in 2018 compared to 7t/ha in 2017, according to the Defra statistics.

 

The reduction in spring barley output is a likely contributor to the UK ex-farm price reported for malting barley during September, which was at the highest premium to feed barley in seven years. According to the AHDB Corn Returns price series, premium malting barley averaged £46/t above feed barley during September.


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Firm prices

 

Adrian Dyter of Crisp Maltings says he expects malting barley prices to stay reasonably firm in the next few months.

 

“It is a very tight supply and demand picture in the EU for malting barley which will keep prices firm. We are waiting to see how the southern hemisphere crop comes in but the prospects are not massive.”

 

He says there is some accommodation by the industry of higher nitrogen levels. “But this needs to be combined with negotiation with the end customer so they have an understanding of what adjustments need to be made so they have enough barley to meet their requirements.”

 

He says fewer adjustments are likely to be necessary with the England and Scotland crops than those in Denmark, North Germany, Poland and Sweden, where the whole crop is 1 per cent higher in nitrogen than in 2017.

 

While nitrogens in the Scotland crop are generally higher than in 2017, Mr Dyter says it is too early to say how they will perform in maltings. “It may have an impact on spirit yield or it may not.”

 

The crop is mainly of good quality, says Mr Dyter. “Generally barley was harvested in good conditions, it is sound and there is little to no damage associated with a wet harvest. No splitting, fusarium or mouldy grains. Generally, the crop is big and bold.”

 

Jonathan Hoyland, barley trader at Frontier says malting barley premiums are between £25-40 depending on quality.

 

“Premiums are pretty strong. We are seeing higher prices for distilling grain barley, mostly due to lower yields but some due to higher N barleys.”

 

 

Malting barley exports

 

Mr Dyter expects exports to remain at a similar level to last year of around 300,000 tonnes but says that, assuming demand remains stable in the UK malting industry and spring barley production is lower, N specifications with a slightly wider range may be accepted than for last year’s crop.

 

According to Mr Hoyland, Northern European malting barley has seen high Ns and low yields so there is good demand for UK exports of the crop.

 

He says: “We may see a slightly higher level of exports compared with last year. Last year the premium shrunk a lot after Christmas. The Danes and French had good quality crops and the Danes came later into the market to sell, which drove the premium down to not a lot.

 

“They don’t have that quality this year so the premium will last longer. But there is uncertainty around Brexit so we need to complete the export campaign by the end of March rather than April, May or June. We have a chance of exporting more malting barley but it is a smaller window.”

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