Malting Barley News

Now that the majority of spring barley has been sown, we can turn our thoughts toward how the market and premiums might well play out during the growing season.

Given the open autumn the area of spring barley in the UK is well down on previous years which will help reduce the supply side of the equation. Unfortunately, the demand side does not offer much optimism currently and therefore it is hard to come up with many positives, however we will try, but nonetheless we need to address the negatives which are contributing to where we find ourselves today.

Demand

The news around consumption of alcohol does not get any better and as a result demand for beer, spirits and whisky across the western world continues to decline. As a result we have seen a steady stream of maltings, brewery and distilling closures across Europe over the last 12 months and more recently high profile names in the brewing world such as Brewdog and Sharp’s have announced closures. There have also been widespread redundancies at an array of companies as they look to reduce costs against this negative looking backdrop. It is likely that more malting capacity will come out before things pick up.

To put it into perspective, recent reports suggest that around 1/3 of the adult population do not drink alcohol at all in the UK, some estimate this figure is 50% in the USA , unfortunately this scenario seems to be gaining momentum across the globe and many have also cut back intake to have at least 3-4 ‘dry days’ every week. Young people have also lost their appetite for alcohol due to a combination of cost and health concerns, one further development is the increasing percentage of people taking MLP1 weight loss drugs which subdue appetites for both food but also alcoholic beverages.

Therefore, it is becoming clear that this is not part of the usual demand cycle but more a long term change in behaviour and habits. So, how does all this look for malting barley demand?

Well domestic demand has traditionally been around 1.8mt with exports around 300kt-400kt. The demand from crop 2026 is likely to be around 1.3mt for the domestic industry with exports also pegged at 100,000t, therefore a reduction of around 700kt. The good news is that this correlates with the area planted to malting barley in the UK substantially down as well as strong global and domestic demand for feed barley, this may narrow premiums but will also put a floor in the market, the result of the growing season will obviously have a large impact on what is needed where and that remains a complete unknown with everything to play for…..that is the negative bit which is nothing that will surprise you and unfortunately what we highlighted last summer.

However, demand remains and throughout these very tricky times we still have some great framework agreements in place and excellent connections with both domestic and overseas maltsters, so rest assured we have good homes for your barley.

Agronomics

As always please make sure your agronomist is aware of the BBPA approved products list and only uses products that are accepted for use on malting barley.

The website address is as follows: https://www.ukmalt.com/wp-content/uploads/2025/04/TECH-487-Agrochemcials-BARLEY-APRIL2025.pdf

Please also be aware that following Brexit the approval process for new active ingredients has diverged and the UK system appears quicker to approve new active ingredients than the European system. Therefore some active ingredients that are approved for use in the UK are NOT approved by the EU and therefore it is important that you discuss this with your agronomist. In short and to keep all market options open to you, please only use products approved both in the UK and EU. Manufacturers are well aware of the situation so should also be able to guide you with product choice.

Old and New Crop Markets

Grain markets have reluctantly tracked outside markets following the Iranian conflict over the last couple of weeks, it is telling that not many consumers have followed this and gains in cereals remain very modest, it is clearly a very different scenario when it comes to cereal supply than the Ukranian issue and knowing how and when it will be resolved is the key to market direction. Therefore, it is making for heightened uncertainty in selling remaining old crop stocks or looking to market new crop. As highlighted earlier, demand for malting barley is poor on both fronts, demand continues to be stagnant and more inflationary pressure on household budgets will not be welcome news for the beleaguered hospitality or alcohol beverage sector.

Currently the new crop market supports a nominal premium of £10-15/t over a feed barley value trading at around a £10/t discount to feed wheat, therefore nominal 26 crop malting barley is as follows:

Domestic market – £175/t ex farm

Export market – £170/t ex farm

Feed barley – circa £160-165/t ex farm

The domestic market is trying to keep barley in the UK against the smaller area being planted whereas feed values have risen and in doing so have reduced the premium.

Events

We are holding some breakfast meetings in April to drill down further into some of these issues and to try and answer any questions you may have, please look out for the invitation and we look forward to seeing you there.

We also have a stand at this year’s Cereals event in June at Clarkson’s Farm on the Cotswolds, details to follow but do please come and see us. We will also be at the Groundswell event in early July, which is held in Hertfordshire.

As always there is lots going on across all crop types and look forward to discussing these issues with you over the next few weeks.

If you have any queries or would like further information on anything mentioned herewith please do contact your usual RAL contact or e-mail enquiries@robin-appel.com