Global forces warning for barley growers

Malting barley growers who have been boosted by a strong demand for their grain this past harvest have been warned that there may be clouds on the horizon.

David Eudall of the Agriculture and Horticulture Development Board told producers at a meeting in Edinburgh this week that while the European market for barley looked strong on the back of poor harvests in 2011 in both Germany and Poland, the wider picture might be different.

“We are getting reports of good barley crops in Argentina, with yields above their normal consumption for their brewing industry. Even if they have not exported in any scale before, they might look at the European market in the New Year, especially if prices remain firm.”

Sign up to our daily newsletter

The i newsletter cut through the noise

Eudall stressed he did not want to overplay that possibility but said such a move might take a little edge of the current market for barley. However, with demand for Scottish whisky at an all-time high, prospects continued to look good overall.

There was more hesitation in his prediction for the wheat crop of 2012 with its fortunes being highly dependent on how world maize production turns out in the coming year. The values of those two primary crops are closely linked and for the past two crop years, wheat values have been lifted on the basis of a short maize crop.

The UK wheat price may also be affected by decisions of two major bio-ethanol fuel companies, Eudall said.

Ensus, based on Tyneside, was predicted to consume one million tonnes of wheat annually, but in May this year it closed its doors after only a few months of operation. Initially this closure was for four months to allow the market to settle down and to try and get European regulations brought into line. But Eudall said the latest information he had was that the restart date for the factory had been pushed back to February or March 2012.

Another bio-ethanol plant, Vivergo, was also due to open next spring but Eudall said he undestood that the date was slipping back.