Renewed optimism for spring barley?

SPRING malting barley prices may have had a difficult time after last season’s bumper plantings coincided with a fall-off in beer consumption. But there is scope for optimism, suggest industry experts.

High harvest tonnages and depressed prices in a crop production cycle are followed by less drilling and lower tonnage from the next crop, with higher prices then possible, according to Graham Redman, research economist at Andersons.

With much winter wheat planted this season, the barley area is likely to fall – leading to reduced crop production by the UK, Denmark and Germany. A fall in cropping may rally markets in 12 months, Mr Redman suggests.

Also, although the economic downturn isn’t likely to correct itself overnight, beer consumption may have troughed and may even be starting to rise again by next autumn, he adds.

Growers able to achieve high yield and a reasonable malting specification could see a reasonable gross margin for spring malting barley. It should also be remembered there can be additional benefits from including spring barley in rotations.

Mr Redman’s calculations indicate a gross margin of £437/ha – the third highest combinable crop option behind milling and feed wheat. This is based on a spring barley grain price of £125/t and a yield of just 5.25 t/ha.

Added to these factors, rising acceptance of popular British brewing varieties across Europe could help growers’ end market prospects, suggests Robert Hiles, global malting barley business manager for Syngenta Seeds.

“Nobody is pretending spring barley has had an easy time recently,” admits Mr Hiles, “but for professional growers who can produce quality, the longer-term prospects shouldn’t be ignored.

High yield was central to profit, coupled with good end market acceptability. Two of the most popular spring brewing varieties – NFC Tipple and Quench – which have a combined English market share of about 70%, had both of these attributes.

Of the spring varieties with full Institute of Brewing and Distilling (IBD) malting approval for brewing use on the HGCA Recommended List, both NFC Tipple and Quench had high-end UK treated yield figures.

“More than that, both have grown hugely in pan-European popularity recently. Both are now popular in Denmark, Germany, Sweden, Holland, Spain and Finland – which could offer export potential for UK growers.

UK growers could also benefit from a new, high-yielding variety with European potential in the form of Propino, said Mr Hiles, which has just been added to the HGCA Recommended List for 2010.

Syngenta has fast-tracked its launch by making enough seed available for around a 2.5% UK market share. Propino was already undergoing IBD testing in the UK, and being evaluated in Denmark and Germany, Mr Hiles added.