A dram fine thing for barley growers

By EDDIE GILLANDERS
Published on Friday 20 January 2012 00:00

BOOMING export demand for Scotch whisky is creating opportunities for Scottish arable farmers to grow more malting barley.

Maltsters will snap up the expected increase in this year’s spring barley crop and prices are expected to remain firm, SAC rural business consultant, Julian Bell, told farmers attending a grain growing and marketing seminar yesterday at Inverurie, Aberdeenshire, organised by SAC and the Home Grown Cereals Authority (HGCA).

Malting barley prices have slipped back in line with wheat prices since the harvest peak of £210/tonne but Bell suggested demand would remain strong at this year’s harvest as maltsters vied to replenish dwindling stocks.

Current buoyant demand contrasts sharply with the depressed state of the market only three or four years ago when maltings were closing on the back of poor demand from distillers and growers were being forced out of production as a result of low prices.

“We may see an increase of 10,000 to 15,000 hectares in the spring barley area because of the weather-induced decline in the winter wheat plantings in the autumn,” said Bell.

“But the overall spring barley area in Europe is expected to fall and the prospects for this year’s Scottish crop are encouraging following a 23 per cent increase in whisky exports in the first nine months of last year.”

He advised growers to work out their costs and keep an eye on the market to lock into a favourable contract price when prices rise, thus ensuring a positive return given a reasonable harvest.

The only downside was the possibility of renewed imports of malting barley from Argentina which had put a ceiling on price rises this season.

Bell speculated that malting capacity in Scotland would have to be increased, even with the new maltings which had come on stream over the past year, to meet the requirements of the distilling industry. Whisky production was expected to continue increasing to meet export demand which was being driven by the burgeoning economies of China and the Far East.

“The prospects for exports will remain strong so long as the robust world economy continues to support demand for whisky,” he said.

With limited scope to expand the area devoted to spring barley, increased supplies of malting barley would have to come from higher yields, otherwise maltsters would be forced to import more barley from south of the Border or from the continent.

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