Things quieten down again
As the nights draw in and temperatures drop, it would not be unusual to be battling away with sowing winter crops between low pressure systems rolling in off the Atlantic. However the reality is somewhat different as high pressure seems to sit stubbornly over Northern Europe presenting you with yet more issues born out of dry conditions, the next ‘block’ of weather conditions will no doubt present us all with yet more challenges. The failure of autumn crops obviously has a potential knock on effect to spring sowing ideas, which we will cover in more depth.
The situation is the same around the world, with extreme weather causing problems and keeping us all guessing as to the next direction markets will take. Snow in Canada, intense heat and dryness in Eastern Australia, dry weather and frost damage in Western Australia to mention just a few pertinent issues. Northern Europe is also seriously dry and problems persist with establishing oilseed rape crops as well as autumn cereal crops which are being sown currently.
The hot, dry conditions we have experienced over the last few weeks have certainly caused some issues which we will cover in this bulletin, all these issues will be covered in more detail at our annual Malting Barley Conference which we host with Syngenta. This year’s meeting is again at Norton Park Hotel, Sutton Scotney, Nr Winchester and is on the 4th December. Further details are included in this email. Places are limited so do please register early to ensure a place, as always we have assembled a very interesting array of speakers.
Malting Barley Markets
The market is currently in a pre-Christmas lull where maltsters, merchants, brewers and distillers are focused purely on taking delivery of contracts which were struck some time ago at levels well below todays. This pre-Christmas squeeze is similar to the discounted harvest period where little new business is done and there is a serious amount of crop to move in a short period of time. Once we get into the New Year we will all have a clearer view as to how well barleys have kept in store and how much more barley the malting & brewing industries will use before crop 2019 comes into play.
The main driver of the price rise seen just before and during harvest was caused by the intense heat and dry conditions witnessed in Scandinavia. Both Sweden and Denmark had so little rain during their growing season that it is a small miracle they harvested what they did. Their yields were obviously well down on average and their grain nitrogens are very high. That picture was replicated in Germany as well so the market ran up fairly violently as the picture became clear. However, French crops of both winter and spring barley are both generally good and remain somewhat cheaper than our crop. The upshot is that maltsters are using barleys with far higher levels of nitrogen than they would normally. This does have an impact on brewing results but is necessary in order to keep a lid on malt prices and to increase availability of malting barley.
The UK has a seriously mixed bag, the winter barleys were generally very good in terms of both yield and quality, the spring barley crop was not so good. Given that the spring crop was drilled far later than would be seen as ideal and then endured extremely dry, hot conditions, it was never going to break any records. The key to how it faired was the ability of the soil type to retain moisture; brash, gravelly soils gave up early on and the yield and quality of crops has been generally very poor. Everything else has varied dramatically with chalk based soils fairing incredibly well in the main and producing some excellent results in terms of yields and quality.
The UK crop is higher in grain nitrogen than usual and also higher in screenings levels than recent years. The south coast has generally produced the best crop and therefore the shipping market will be active as buyers seek to take delivery of lower nitrogen barleys in order to help bring down nitrogen levels in the malt. High nitrogen malt gives brewers big problems with protein haze and lower extract levels, both lead to higher production costs in the Brewhouse and higher costs to the consumer.
There is no question that end users around the world are having to adapt to a ‘less than ideal’ standard of malt and some are reticent to do so. This will be a key factor in determining the market as we go through the turn of the year and approach harvest 2019.
2019
With Brexit looming and a deal appearing some way off we face a big problem with how to market the 2019 crop. As we see it today, any export business concluded for shipment past the 31st March 2019 carries the caveat that all tariffs are payable by the seller. That is clearly not a position any merchant will get into and nor will you. Luckily we do a lot of business with domestic maltsters so when they are in the market we will be able to price your barleys tariff free. However we have built up great relationships with overseas maltsters over the last few years and they will still need our malting barley – we just need to have a clearer view of any potential tariffs and of course any customs clearance issues that may arise. This is no doubt something that will be addressed going forward but at the moment the export of malting barley off the south coast is on hold beyond 31st March 2019.
As stated our excellent links with the domestic malting industry will come into its own as there is no doubt there will yet again be a substantial area sown for crop 2019, it is vital you sow the right variety, with this in mind please see below:
Propino – Has been a real stalwart but its crown is now slipping in terms of agronomics and of course lower yield. Market demand will remain strong throughout the 2019-2020 campaign but its area will fall dramatically.
RGT Planet – The biggest variety globally of any crop ever produced, therefore a huge earner for RGT and a variety that will take a very big share of crop 2019. Yield and agronomics are top of the list and acceptance of the variety is global. Need to be aware that it does not cope very well in a wet harvest!
Laureate – Has proved again to be a very high yielding, resilient variety which suits brewers and distillers. Subject to Brexit developments we will be exporting the variety off the south coast from crop 2019 as well as supplying distilling requirements to domestic maltsters.
Diablo – Another dual purpose variety with very high extract levels and extremely high yields, combined with good agronomics. Very little seed available for sowing in the spring of 2019 but looks like becoming a big variety.
Beyond these 4 you have to have an extremely good reason and a very good contract to look at growing any other spring barley variety.
There is always a lot going on in the world of malting barley, far too much to cover here, we will cover a whole host of current issues on the 4th December, in the meantime we will keep you posted on any major developments.
If you have any queries please do let us know.
Jonathan Arnold
