Approval supplied for farmer supplier

23 July 1999

Barley harvest flyer not met by an eager trade

By Robert Harris

MALTING barley harvest got off to a flying start this year, but the same cannot be said for the market.

With a surplus on the cards, consumers are showing little interest and low premiums mean farmer sellers are a rare breed. Prospects of a marked upturn look slim.

About a quarter of malting barleys have been cut, and low nitrogen levels are the main concern after plentiful rains, says Cargills Chris Toft.

"Very few samples are in the 1.55-1.75% range, where the maltsters want it. But we are not into the bulk of the crop yet." Premiums vary from £5-10/t over feed, which is averaging about £67/t ex-farm, he adds.

Bids are very conservative, agrees Soufflets Nigel Goodhew. "There is almost no market for Fanfare. Regina is worth about £6-£7/t over feed. Halcyon is worth about £19/t at 1.65%." But trade is very thin – consumers are happy to wait for the crop, he says.

Although the HGCA forecasts a barley harvest of just 6m tonnes, usable malting barley is put at 2.2-2.4m tonnes, suggesting a small malting barley surplus.

This, and fiercely competitive international malt markets will hang over the market, says consultant Michael Gutsell. "Maltsters have had to deal with the strength of sterling and the unpredictability of the EU export campaign. Brewers also operate under increasing competition, making use of cheaper malt supplies."

"Do not throw something at the market that the market does not want," is the advice from Michael Banks of Banks Agriculture.

Intervention prices for November are, at current exchange rates, worth about £7/t more than spot feed values, he says. And demand for feed barley is improving; Iran bought 100,000t this week, and Iraq and Saudi Arabia may come to the market soon.

Improved Third country trade for malting barley might also help, with EU supplies looking very competitive, he adds. "We understand that Brussels will start to open tenders for the open market from the beginning of August."

But the UK barley area could crash in the coming season unless maltsters and brewers start sending some "strong signals" to farmers and the trade, Mr Banks warns.

"Growers are asking our farm traders what they should grow. They are finding it a little worrying that we cannot give them advice." And, given forecasts of very low premiums, many farmers will not grow malting barley without a contract, he adds.

"If total production falls below 5.5m tonnes next harvest, I would see this as catastrophic for the UK malting barley industry. The UK could become a net importer of malting barley." &#42

Talks underway between MM and customers

MILK Marque has started face-to-face discussions with its main customers to work out an acceptable way to secure the current selling round, but prices and volumes are not to be included at this stage.

The talks are only possible because trade secretary, Stephen Byers, to whom the Monopoly & Mergers Commission report on the sale of raw milk was handed, has given Milk Marque three months grace before it has to construct a new transparent selling system.

Plan deliveries

Negotiations, and price agreements, need to be struck before the six-month supply contracts run out in October. A Milk Marque spokesman suggests talks will have to be completed by mid-September to allow time for the co-op to plan deliveries to customers.

lMidlands Co-op has confirmed it is "responding to market pressures" and dropping the price for a standard litre (4.1% butterfat, 3.3% protein) by 1.65p/litre from Sept 1. The cut will move the co-op more into line with other buyers – in May it paid 20.63p/litre, putting it at the top of our milk price table. Midlands co-op also paid the highest average price last milk year, at 21.23p/litre. &#42

Approval supplied for farmer supplier

COUNTRYWIDE Farmers, the UKs largest farmer-owned agricultural supply business formed from the merger of Midland Shires Farmers and West Midland Farmers, has been officially approved by the Court.

Operations will be amalgamated over the next six months. Shareholders in the two companies will receive shares in Countrywide Farmers, which is expected to have a turnover of almost £200m in its first year from selling 300,000t of compound feed, £8m of crop protection products and 150,000t of fertiliser, as well as trading 600,000t of grain. The company also has 40 retail stores.

lWarwickshire Quality Calves, which had been using MSF as managing agent, and Mid West Calves, which had used WMF in the same capacity, are merging to form the UKs largest calf co-operative, Quality Calves. Countrywide Farmers will act as managing agents. &#42

Buyers show little interest in malting

The malting barley market is looking distinctly flat, with a standoff developing between consumers and farmers. Unless brewers and maltsters open lines of communication, the UK could become a net importer………………… 19

Oilseed aid hope

Latest figures from EU grain traders suggest a big rise in industrial oilseed plantings which could allow growers to escape crippling penalties on area aid payments this season….page 20

Off the hook

British products will not be hit by import duties imposed by the US this week in retaliation for the EUs continuing ban on hormone-treated beef, since the UK has always believed the beef was safe……… 22

Tender subject

British Sugars tender system for trading sugar beet quota has been branded a poor deal for rhizomania-hit farmers by one broker who reckons it will fail to realise a true value; but BS says interest is strong…………………… 23

Pigs perk up

Harvest is under way at Hoe Hall, our adopted farm in Norfolk. Arable crops look promising, which is just as well given the low prices, and the units organic pig enterprise is going from strength to strength…………………….page 24

Ewes go cheap

Prices for second quality breeding ewes are well down on last year, and some are worth little more than culls, but there is reasonable demand for better sorts from producers looking for early lambers… 31

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