The 2018 Malt Harvest
Do you monitor Wheat Futures?
We don’t normally but if you don’t recognise the term …then I’ll explain it’s the European benchmark for setting prices on wheat or more importantly malting barley for brewers.
UK Maltsters are likely to buy around 1.9 million tonnes of barley!! to supply distillers who look for nitrogen contents below 1.6/1.65% and brewers below 1.8/1.85%.
There is two categories;
1. Winter Varieties:
Flagon, Talisman, Venture, Craft
Concerto, KWS Irena, Laureate, RGT Planet, Propino, Chanson
If you started a brewery in recent years you won’t have experienced much change in malting barley pricing or maybe you’ve been in the brewing industry for many years and you have experienced malt prices vary greatly, on occasion it falls in your favour and on other occasions it doesn’t, well 2019 malt prices aren’t going to be in anyone’s favour.
Geterbrewed distribute malt for Crisp Malt throughout Ireland and have in recent years increased the volume of malt they sell significantly, despite volumes increasing significantly the incoming malt harvest is going to see malt prices rise to levels not experienced before by many brewers
With no break in the long hot and dry weather that has dominated the weather pattern over NW Europe since early May, this kick started an early start to harvest of winter barley
Harvesting of winter barley started in the last few days of June. Despite the balmy weather conditions, most reports of both yield and quality are favourable despite what was expected. Winter malting barley grain nitrogens are in general low, with most samples through the Crisp laboratories being 1.65% or less. Grain size is variable and in general smaller than the 5 year average, with a wide range (65-95%) in barley over the 2.5mm sieve. Maris Otter performed relatively well, particularly on chalk soils, all Flagon samples seen so far are useable, Venture suffering another year of poor screenings and Craft producing the best samples in terms of grain size.
Whilst the weather has limited the potential of the winter sown crops, it is having a devastating effect on the potential of spring sown crops and in particular malting barley in NW Europe. Yield reductions of over 50% are talked about for many Scandinavian and north German crops, whilst further east and in UK there will be a significant reduction in output. Further compounding the yield issue will be the grain quality, with high or very high grain nitrogen levels likely in all of the drought-affected areas. The consequence of this will be a further sharp movement upwards in malting barley prices as traders in particular scramble to cover their short positions and first-hand sellers enter the market attempting to buy back some of their sales.
The Malt Harvest
With a lack of rain and soaring temperatures in northern Europe, the consequence is early harvests, low yields, quality issues (particularly in the malting barley crop) and price levels last seen in 2012. The hot and dry conditions have also had an impact on grain production in Russia and Ukraine.
Crop Prospects UK
Harvesting of winter malting barley in England was finished by mid-July with the majority of it off farm and into maltsters and merchants stores already. Whilst yields are at best only up to the 5 year average or slightly lower, quality is very good. Grain nitrogens are slightly lower than last year whilst grain size is also slightly smaller, in part reflecting the moisture levels 2% below average of the harvested barley.
With the un-broken dry weather, harvesting of spring barley in England started straight after the winter crop, coming at the same time as winter wheat and oil seed rape on many farms. Due to the wide planting window this spring and the difficult growing conditions, it is no surprise that yields and quality vary enormously not just from area to area but from one farm to the next.
So far the best quality samples came coming from areas where the underlying chalk which was saturated during the winter and early spring, allowed spring crops to send roots down to access water and continue growing during the hot dry period from the beginning of May.
Grain nitrogens are in general lower than was feared but still significantly higher than in past seasons, however most of the crop produced in southern and eastern England should find a malting home as maltsters raise their nitrogen intake limits. Further north in England, reports are of a more ‘difficult’ crop.
Spring barley harvesting in Scotland showed that grain nitrogens are higher than the industry has been accustomed to in recent years and that yields are lower than the 5 year average, again due to lack of rainfall. Max level of Grain nitrogen will have been increased in certain areas especially Scotland and Distilling levels will most definitely be increased.
For EU Harvest reports, the summary isn’t good! Throughout Scandinavia, Poland, Czech and Slovakia the story is the same: low to very low yields and high protein. It is thought likely that for the EU to be barely self-sufficient, barley with up to 13% protein (2.08% TN) will have to be accepted by the malting and brewing industry. Only France and southern Germany have reasonable to good crops.
EU wheat markets have soared in the past month as the forecast size of the EU and Russian crops continue to decline. Feed barley supplies, already tight at a world level, have been further reduced by the drought and now the first downgrading of EU corn prospects is happening. These rising feed grain markets have been mainly responsible for the dramatic rise in malting barley prices, however it is now the overall supply / demand question that his adding additional strength to the malting barley market. Malting barley prices for ‘standard’ quality have now risen significantly.
Competition for the small quantities of low protein barley that is available from maltsters supplying the distilling, craft beer and other specialist markets is intense and will only add further upwards price pressure for specific varieties, origins and qualities.
So what does it mean for Crisp Malt Customers, unfortunately prices will increase but the quality will remain high spec, the management team at Crisp have taken the decision to put a clear focus on the quality of the malt and to continue to produce high spec malt so they have had to give the farmers a much increased price and that has to be passed on. Geterbrewed have managed to increase volumes greatly which has slightly mitigated that increase but you can trust the quality!!