E-Malt.com News article: 2355

New Zealand: Last month's floods may put up the price of a pint of beer – at least for the manufacturer, local press Stuff.co posted on March 18. Both the brewing and animal-feed industries are facing a shortage of grains after crops were damaged or destroyed by last month's flooding.

Dave Allan, raw materials manager at the International Malting Co in Marton, said the drought in the South Island and the floods in the North Island had created an unprecedented shortage of malting barley. Malting barley may have to be imported, which has never happened before, although processed barley has been imported on rare occasions. The New Zealand brewing industry normally sources 100 per cent of its barley from the domestic market.

He could not say for sure how this would affect the price of a pint. New Zealand growers usually have a fixed contract price. "If you have to import, the cost may not be the same. Until you go down that track, you just don't know," Mr Allan said. "If you want to go down and buy a loaf of bread every week, you expect it to be the same quality. If you buy a bottle of beer every week, you expect it to be the same quality. But the quality (of the malting barley) is basically inferior to what we'd expect. In a year like this, there are no winners. "It's probably our worst situation in living memory. Our quality is a lot less and our volumes are a lot less."

He said the South Island had been heading into a drought and then experienced a month of humidity that ruined a lot of crops. The North Island was looking at a good year until the floods obliterated large areas of crops. "We principally rely on crops grown at one time of the year, which is spring. The downstream effects will be with us for the next 12 months. It's a long way to go yet," Mr Allan said.

David Fleming, a grain merchant, said it was too early to put an exact figure on losses, but flooding could have halved the cropping yields from the region. "I'd say it would be down 50 %. A lot has been damaged and a lot has been written off completely. "If it dries out, we might be able to salvage some. It could be down more than 50 %. The quality won't be very good."

Federated Farmers' grain council manager Kevin Geddes said the situation for animal feed manufacturers was more manageable, because grains are regularly imported and mixed with local crops. "We know the industry has the flexibility to deal with what's available. Feed and flour millers have the technology to blend quite a wide variety of grades." He said New Zealand was not self-sufficient in feed grains and about 200,000 tonnes was imported each year. It was a bad year for crop growers throughout the country and many were reliant on one harvest a year, said Mr Geddes, who is based in Ashburton. "It's been a challenging year down here, but it's been a hell of a lot more challenging up there."


18 March, 2004