Europe: 2007 malting barley crop again disappointing

This year’s malting barley crop in Germany has again been a disappointment, analysts of Bestmalz reported on September 26. In addition to a decline in the area of cultivation land of around 10% nationwide, a lack of rain in April also contributed to the below average crop. The low crop entails an average protein level of the delivered malting barley of around 12%. The low crop yield and the price development of the past weeks have caused the malt industry to tolerate barley with a protein level of up to 13% upon delivery. The sorting of the barley varies greatly depending on region. The changeable weather conditions during the crop led to goods containing more moisture than usual compared to last year. The main malting barley variety in Germany continues to be Braemar as well as, to a limited extent, Auriga, Belana, Pasadena and Scarlett. Trials have been conducted with the new varieties Marthe and Power.

Similar experiences have also been noted in France, the Netherlands, Austria, Czech Republic and Poland . Here, too, low crop yield and high protein levels characterise the crop; the situation is slightly better in Great Britain and Scandinavia. The most important varieties in the EU are Sebastian, Power, Class, NFC Tipple and Prestige.

The available malting barley quantities are, once again, in deficit, nevertheless to a lesser extent than in the previous year. Whilst in 2006 there was a deficit of 700,000 tons of malting barley in Europe, this amount should be halved in 2007, insofar as those higher protein levels will be accepted. In contrast to last year, there is, nevertheless, a lack of any reserve and this is not expected to ease with the winter barley.

As a result of these developments, malting barley prices have been continually reaching new highs over past weeks as can be seen in the following diagram. An improvement in the situation is not currently expected.

Agriculture can only benefit from the price development to a very limited extent as its produce is often sold through pre contracts. This is also the reason that hardly any pre contracts are currently being offered for the forthcoming crop 2008 – something which is not expected to change in the next few months. With 100% price volatility, it is no longer responsible, from a business viewpoint, to offer malt agreements without sufficient barley cover. The brewing and malting industries should, therefore, consider and discuss possible alternative contract forms in good time.

Malt capacities 2008 have been sold well. And there is, particularly internationally, continued demand. Due to the high barley prices, high prices are being offered and these are accepted by the buyers.

Due to the quality characteristics of the harvested barley, the malt will not fulfil several specifications. This affects particularly the parameters of extract (low) and protein (high) as well as the connected levels of soluble nitrogen (high), Kolbach index value (high), EBC and colour of wort (high).

Delivery of malt crop 2007 will begin in the next few days.

28 September, 2007