United Kingdom: Scottish farmers to sow less malting barley if there are no long-term contracts

Scottish farmers are likely to vote with their feet by sowing less malting barley next spring unless Scotland’s whisky industry decides in favour of establishing long-term contracts in order to bring a measure of stability to the barley industry, Farmers Weekly Interactive communicated on January, 1.

“We don’t want to get to next June with crops in the ground and find we’re going to lose £80/t on every tonne we sell," said NFU Scotland arable crops committee chairman, John Picken.

"Distillers need to come out and tell us what they need and we as farmers should only be sowing varieties if we have an assured market and know the price we need to cover our costs."

With a huge surplus of barley hanging over the market, a reduction in whisky production as a result of global recession and intervention being withdrawn next year, Mr Picken sees little prospect of the market for malting barley improving – unless next year’s crop is hit by bad weather.

"The consensus in the trade seems to be there will be little improvement in the market until 2011," said Mr Picken.

Mr Reid’s call for longer term supply contracts came at the HGCA’s Scottish Outlook conference at Perth where HGCA chairman Jonathan Tipples offered to act as a facilitator to bring distillers, maltsters and growers together to hammer out the future of the industry.

"All parties in the supply chain must have economic viability," said Mr Reid.

As a representative of the 55 distillers in the SWA he was prohibited under competition law from speculating on future prices, he said. But he rejected a suggestion distillers were undermining the UK market by importing malting barley from abroad.

"It just isn’t true that large quantities of barley come in from abroad," said Mr Reid. "More than 90% of the barley used by Scottish distillers is grown in Scotland. The industry is committed to using Scottish Quality Cereals wherever possible and barley is only imported when the quality of product is not available on the home market."

In 2008, the Scotch whisky distilling industry bought 470,000 tonnes of malting barley and 530,000 tonnes of other cereals, mostly wheat.

06 January, 2010