Germany: In spite of the concentration of the German brewing industry there are still a large number of independent brewers of any size. As there is also a large overcapacity, competition in the beer market is fierce. Brewers, and especially the large powerful groups will exert pressure on all their suppliers, not only maltsters, in order to reduce the cost of their raw material and other items needed in the production and selling process. There is also the known overcapacity in the EU malting industry, and virtually no maltster in Europe comes close to the market power of the a.m. brewing groups. Maltsters will pass on the pressure to the barley market, but they will only succeed to purchase at low prices, if there is a large enough grain crop and a large enough offer of malting barley. Farmers collected high prices for their malting barley this year, but certainly not a good premium for malting barley above feed barley, wheat and rapeseed. The pressure on malting barley premiums has started to backfire this year, as farmers have reduced malting barley acres to some extent, compared to 2002 (2003 was an irregular year). Farmers' turning away from malting barley could develop into an avalanche in coming years.

27 February, 2004