Crop 2017 September Update by Bob King

Introduction

Harvesting of winter barley in the south and east of England started in the last few days of June; the earliest start since 1976, with many growers starting more than 2 weeks earlier than usual. The early harvest resulted from a combination of the spring drought and a period of high temperatures and above average sunlight hours in June. With most of the winter barley harvested by 15th July, growers in the south and east of England were anticipating completion of their entire cereal harvest by the end of July. Unfortunately the weather from mid-July to mid- August was the complete opposite of earlier in the summer, with several consecutive days of heavy rainfall and few harvesting windows. As a consequence there were large quantities of wheat and significant quantities of spring barley harvested in England far later than anticipated with many crops being downgraded due to poor quality and weather damage. Harvesting of spring barley in Scotland started in the last 10 days of August and is progressing between showers with the bulk of the crop likely to be completed by mid-September.

Crop 2017 – Winter Barley

With the very early start to the winter barley harvest; there were some concerns that the combination of spring drought and rapid ripening due to the high temperatures would result in a very high nitrogen malting crop. However the actual results are better than expected; particularly when compared to 2016 when the lack of sunlight in June resulted in a very low nitrogen crop but high screenings and consequent high contract failure rate. The 2017 crop, although higher in nitrogen than 2016, has much better grain size resulting in high contract pass rates (apart from a few Venture crops that again have high screenings).

 Crop 2017 – Spring Barley

The spring barley area planted this year in Great Britain was 725,000ha up 9% on 2016 and the third consecutive year of increase. The crop in general was sown in better conditions and time than that of 2016; with the prospective harvest forecast to produce a very large surplus of malting barley in England and a balanced supply / demand for Scotland. However a prolonged spring drought combined with the poor weather in late July and August has resulted in a smaller crop of in general significantly higher nitrogen barley in England. Parts of southern England where much of the barley surplus should be have produced high nitrogen samples which have also pre-germinated. Only in small areas of the south are there any crops below 1.65% nitrogen. Further east the picture is of great variability in nitrogen but good grain size and few reports of pre-germination. Traditional low nitrogen producing areas of East Anglia have produced significantly smaller quantities than usual. Further north in England the story is similar with reasonable crops but a shortage of low nitrogen barley, particularly in Yorkshire where the maltings concentrate on the production of distilling malt. Overall the English situation is one of large quantities of variable nitrogen barley (but tending to be significantly higher than in past years) with a shortage of low nitrogen supplies, grain size that is generally good and a significant amount of barley that will be downgraded due to poor germination.

Early results from Scotland are more promising and a full picture will be available later in September.

Markets

Even though the winter malting barley crop has produced more usable barley than 2016, it still appears that the malting industry would like to purchase more than they have been able to. Against a background of higher feed barley and forward spring barley markets , keen demand from maltsters and a weak sterling,  harvest movement winter malting barley prices are significantly higher than 2016. Spring barley prices in England for harvest movement have been dictated by end-use with barley under 1.65% nitrogen, particularly of the distilling varieties Concerto, Odyssey and Laureate commanding premiums of up to £25.00 over standard specification barley. The market in Scotland has yet to develop but will be influenced by market developments further south and any weather problems that may develop.

Values for malting barley away from the harvest intake period are mainly driven by the EU export value. As with 2016, the EU supply / demand situation for malting barley is not easy to evaluate. France has a better winter and spring crop than 2016, Germany has a smaller, weather damaged crop and increased import demand; further east the Czech, Slovak and Austrian crops have been affected by drought. Denmark and Sweden appear to have good crops with a large exportable surplus, although harvest is not yet complete. The UK has a much reduced (from expectation) exportable surplus. The overall supply will depend on where maltsters and brewers set their specifications. Markets have eased in recent days from the pre-harvest highs, but in absolute terms show a large premium over feed barley reflecting the relatively tight supply and the as yet unresolved quality issues in some markets.

 

 

 

Bob King                                                                           5th September 2017

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