Barley growers struggle with bumper crop of variables

MALTING barley growers attending a meeting in Edinburgh yesterday may have hoped to receive a positive unqualified opinion on whether they should get their seed drills ready to put in this year's crop, writes Andrew Arbuckle.

The decision will require to be made within the coming weeks. Some cereal growers are still drilling winter wheat in preference to their usual spring barley acreage. Others are even considering a fallow option unless the barley price firms up.

While Jack Watts, an analyst with the Agricultural and Horticultural Development Board, provided a number of indicators on how the market might go, it was obvious that there were a great number of ifs and buts in trying to determine where the malting barley trade might end up this season. He pointed out that malting barley was closely linked to the price of feed grain and this in turn was heavily influenced by the domination of the maize crop in the United States, which supplies around about 40 per cent of the world feed grain production.

"The condition of the US maize crop sets the pace. It is one of the very few single factors that could push the price," was Mr Watts' view on the world price of grain.

The problem is that this Stateside crop has still to go into the ground and if there are any major weather problems during its growth, they all lie around the corner.

There has been a great deal written about the large stocks of grain in stores throughout the world and the influence this has on the price of barley in this country, but Mr Watts demurred a little from this view, saying that while the overall price was influenced by these stores, the reality was that there was little malting quality grain in store.

Germination was a key factor in malting barley and it could be impaired with anything less than first-class storage. Therefore maltsters generally wanted new crop grain, the problem being they linked their price to feeding quality grain.

So far this year there has been the backstop in the barley trade, with grain being taken off the market and put into EU intervention stores, but this option will not be available in 2010.

Initially the removal of this base might seem bad news but without the other necessary part of intervention storage – the selling of the grain abroad with export restitutions – Mr Watts believed the market might work much better with new markets opening up.

One new factor that will influence Scottish cereal markets this coming season is the massive intake of wheat at the Ensus plant in north-east England.

He suggested any wheat going to this renewable energy processing plant could change the equation for animal feed manufacturers who have been using wheat in their rations. Any change towards barley would have a positive influence on the price of this commodity.

Speaking on the Scottish whisky trade which dominates the malt market in this country, he pointed out that there have been positive indicators coming through on sales.