Price prospects looking
grim for malting barley
WITH first cuts of malting barley expected in the next few days, growers face the lowest prices and premiums for many years.
The past few seasons have produced some excellent financial results, with top samples at times getting as much as 50% premium over feed barley.
Certainly maltsters have felt the pressure. "Their raw material prices were high, domestic demand for malt was slipping as imports made inroads and profits from exports were squeezed by the strength of the £ against the deutschmark and US$," says independent consultant Peter Brown.
But these pressures have now rubbed off on barley prices, with malting rates following the slide in feed values. Ex-farm prices are offered (but so far not accepted), at anything from £78/t to £88/t for winter malting barley, and £80/t to £90/t for spring varieties.
Export values, loaded on a boat for January 1998, are quoted at £104/t for samples of up to 1.85% nitrogen, less than 4% screenings through a 2mm sieve, equivalent to about £90/t ex-farm.
Demand at harvest is likelyto be muted by the big carry-over of old crop grain and malt.
"The one glimmer of hope for an upturn in prices could be an extensively weather-damaged crop," says Mr Brown. "But this would inflict such other costs on growers that they would be better off hoping for a dry harvest.
"What premiums are available will go to growers who prepare their barley well by the removal of screenings, by careful sampling and presentation, and by rigorous post-harvest grain store discipline," he adds.
Growers with high-priced contracts (some of which are £50/t over current values) are advised to take extra care. Scrutiny at maltsters intakes will be rigorous and out-of-spec barley will be rejected without hesitation.