UK: UK farmers expected to profit from their barley crops in 2012

Growing global demand for malting barley and a predicted UK shortage of pulses mean there are good opportunities to profit from both crops in 2012, Farmers Weekly reported on January, 5.

In spite of the troubles in Europe, elsewhere, the world beer market is growing, the world barley area is declining and the UK is now seen as one of the most reliable sources of malting barley, according to Stuart Shand of Gleadell Agriculture, who points out that there’s only just enough malting barley in the world to meet demand.

“Even though beer sales are down in Western Europe, globally they continue to rise about 2.5% per year,” he noted. “This positive beer consumption, together with tight world stocks, means that there are currently big premiums on offer for malting barley.”

Currently, the UK malting barley crop is worth a premium of EUR30/t (£26), he said.

However, the growing dominance of the top brewers in the world means that variety choice is an important consideration for any grower, Mr. Shand said.

“The top four brewers now account for over half of the world market. In 2000, they represented less than 20%. So make sure that you look at what the market wants.”

The brewers have enormous influence, but the EU export market is also crucial and it dominates the UK malting industry, he confirms. “Mostly, it tracks the wheat price.”

This means that growers should manage their risk, he advises. “Don’t sell more than 50% of your crop before harvest and consider the use of different marketing methods. Selling all of it on price is too big a damage.”

“The open autumn has meant that all the winter crop drilling has been able to take place. So we’re expecting the spring barley area in England to be down by 5-6%.”

06 January, 2012