Better times on the way for growers of malting barley

Malting barley growers who have experienced a couple of largely unprofitable years due to over-production have been told there is a bright future in the short and medium term.

At a meeting in Perth organised by the Home Grown Cereals Authority, Eddie Douglas, the operations manager for Bairds Malt, pointed to a Scottish malting sector now 95 per cent devoted to the distilling market. As far as Scotland was concerned, he said: "Beer has become small beer with only two large-scale breweries north of the Border."

Meanwhile, capacity has increased, with two new distilleries at Roseisle in Morayshire and Girvan in Ayrshire - with capacity for 12 million litres of spirit and five million litres respectively

"Glenlivet distillery has also expanded to ten million litres," he said. "Distillers have spent millions on new facilities … the new capacity will help meet increasing demand from countries such as Brazil, Russia, India and China. Many distilleries moved to a five-day mash cycle when demand was low. It is relatively easy to move back to seven days and the effect is a 40 per cent increase in output."

There had been destocking in 2008 and 2009 in the face of a global drop in Scotch consumption from 340 million litres to 310 million litres, but Douglas said the forecasts were for the return of growth.

The lead time is three years generally, but for the premium malts, it is from ten to 15 years. "The distillers invest heavily in these brands and the last thing they can afford is to run out of stocks. Less than 10 per cent of Scotch is consumed in the UK, so exports are vital," he said.

The malting sector had also expanded, with his own company having installed a 55,000 tonne facility at Arbroath - the first new maltings in Scotland for 25 years - but there had also been a 20,000 tonne expansion at Buckie and 80,000 tonnes at Berwick. He noted that instead of buyers purchasing to meet annual demand, they were now looking at supply continuity.

For farmers, it is a case of deciding how heavily they are to commit to supplying an adequate tonnage of raw material. In 2008 and 2009 the total tonnages of spring barley had been 1.47 and 1,58 tonnes. In 2010, despite limited recovery in demand and a carry over of stocks the supply situation was tight following a 1.29 mill tonne harvest. Early sown crops in particular had failed to yield well.

Looking to the future Douglas said Scottish growers should aim to produce a 1.6 million tonne spring barley crop from 260,000 to 270,000 hectares. This would supply about 800,000 tonnes for the malting market.