12 December 1998

BOUNCING BACK IN FAVOUR

Confidence in spring barley has returned. Gilly Johnson finds out why.

itability looks more healthy than does that of winter options – mainly because it costs about £20/t less to grow in variable inputs and theres more chance of achieving the top premiums of £30/t, says Gary Mills-Thomas of New Farm Crops.

His calculations (see table) put the spring crop ahead of winter barley by £43/ha (£17/acre) in an average season. Last year wasnt average; barley yields were well down and that gave the spring option even more of an advantage, worth £93/ha (£38/acre).

However, returns depend on malting premiums, and these have taken a battering from over-supply and the strong pound. Now some cautious optimism is returning to malting markets. Predictions from the Institute of Brewing (IOB) are that world barley plantings could decline, tightening supplies and bolstering malting margins in the UK.

So the arguments in favour of spring barley are mounting. The case against includes higher seed costs this year; the price tag is £30-40/t more. Its because of greater demand, seed shortages following the difficult harvest, a recovery in baseline feed barley prices, and the reasonably healthy malting premiums of £30/t or so.

Which varieties are growers choosing? According to Mr Waite, malting favourite Optic is top of the shopping list, selling at the higher end of the seed barley market which ranges between £255-300/t. "Its doing well on both sides of the Border," says Mr Waite.

Although Optic is a shade later than ideal for a northern climate, as part of a wider variety portfolio it can help spread the harvest, he suggests. "If it is managed properly, theres no problem with later maturity. Optic is on the up and is likely to take 20-25% of the market. Yields were down last year and seed supplies are becoming tight, so it would be wise to place orders before Christmas."

Optic is replacing Prisma, which is being viewed less favourably by distillers. It is also eating into Chariots market share.

Demand for Derkado is likely to remain steady, says Mr Waite. This variety is suited to certain specialist malting processes. Although up-and-coming barleys may challenge its market, for the moment it seems secure. Maresi, for the high enzyme market, holds a similar position. Distilling variety Delibes needs some care with seed rate.

"Beware: Delibes does tiller well. Its often sown too thickly and this leads to high screenings. Growers should ease back on the seed rate."

"Theres a lot of farmer interest in new variety Chalice," says Mr Waite. "It gives similar yields to Optic, but is earlier to harvest." Landlord has been awarded full IOB approval for the north-east and north-west, and will take 6-8% market share, he predicts.

On the feed barley front, spring variety choice boils down to Riviera, with a following for Hart. Delibes and Chariot are used as dual malting/feed spring varieties, says Mr Waite.

Malting barley exports bolster the UK market. Demand and supply look balanced at the moment, but trader John Calder of Matrix Trading anticipates significant opportunities for UK crops from next harvest – another positive signal for premium potential.

"Anyone looking to grow barley for export should remember that the markets are conservative in their tastes, and are slow to change to new varieties. Chariot, Optic and Prisma are well recognised by foreign buyers, as is Alexis for some niche markets."

In East Anglia, spring barley is being reconsidered as a premium option following roots, says Ben Freer, of the Morley Research Centre. "The arguments do look good on spring barley. Agronomically, its an easy crop – the drilling window is wide and flexible, spreading the workload. Its also a take-all break, and can help in blackgrass control. Compared with other spring options such as peas, the seed cost is less."

Due to overshoot penalties incurred in the oilseeds sector, its likely that cereal support could overtake rape for the first time. If the UK continues to be penalised, rape for harvest in 1999 might only attract £205/ha (£75/acre); that compares with cereal support at about £250/ha (£101/acre).

"But malting premium needs to be protected, and that means achieving the best quality. Its wise to have a soil test done over winter to establish what the residual nitrogen is, so that fertiliser applications can be tailored correctly."


Winter malting barley Spring malting barley

Normal year:

Yield t/ha 7.96 6.75

Base price £/t £66 £66

Premium £/t £10 £30

Total output £/ha £605 £648

1998:

Yield t/ha 6.72 6.29

Base price £/t £66 £66

Premium £/t £10 £30

Total output £/ha £511 £604

Source: New Farm Crops, using NIAB data