UK: The Maltsters Association of Great Britain appealed to farmers to keep growing malting barley

Addressing the issue of the malting barley market conjuncture, Roger Baird, a director with Scotland's biggest independent grain merchant, WN Lindsday, said that it is an emotive subject, The Scotsman published October 20. He added: "But more so in the past few years as good natured, on-farm haggling has been replaced by serious criticism that maltsters were squeezing growers too hard.

That led a few years ago to an NFU Scotland campaign for fixed forward contracts at £100 a tonne. No contract, no barley was the threat. Farmers being farmers an attachment to what has been Scotland's staple, and in the good years extremely profitable, crop, the next spring most grew their usual acreage.

Maltsters, struggling with their own problems of over- supply at home and abroad, banked on that happening and prices continued to hover in the £70s. No more. Malting barley production in Scotland was down more than 12 per cent this year and even with prices now past £100 per tonne for the first time in a decade, there is no indication the slump will end.

Partly that is because maltsters have succeeded, as one put it, "in pulling farmers off". Partly it is because wheat prices have rocketed, although easing this week, because of world shortage and wheat yields are much higher than malting barley.

Partly it is because of a flurry of announcements about biodiesel plants to process oilseed rape, yet another option.

"We had over-capacity for malt production in Scotland and relied a lot on exports," said Baird before an NFU Scotland seminar for grain growers at Carfraemill. Now both capacity and export market have shrunk dramatically. But so has production. "It's the merchant's job to ensure smooth supply and a sustainable return to the farmer," said Baird. "And that got out of kilter."

Didn't buyers of malting barley see the train coming? He said: "Perhaps. But we didn't expect it to arrive so quickly, or realise that the acreage was so low. Now supply and demand is working. It's up to the trade to take the emotion out of an emotive subject and pay what's needed."

Roger Woodley, chairman of the cereals committee of the Maltsters' Association of Great Britain (MAGB) - its members buy about 1.6 million tonnes of malting barley a year - made his heart-rending appeal to growers earlier this week. He said: "A number of factors may lead growers to consider whether they plant malting barley. We urge them to do so and want to assure farmers that UK maltsters will pay an attractive price."

John Kinnaird, NFU Scotland president, almost said, the message had finally got through: "But it is now essential that maltsters come out with clear, transparent contracts so that farmers know what price to expect before they sow a crop."

Common agricultural policy reform and a single farm payment not tied to crops or livestock, he said, meant no farmer need grow unprofitable crops.

Maltsters and merchants, particularly the biggest, are shy. They do not like publicity or dropping a hint to competitors about their plans. But some are now offering malting barley contracts for the next two harvests at more than £100 a tonne. It's their only chance.

20 October, 2006