Barley still looks an attractive option for UK spring
planting programmes despite the huge supplies of the grain from a bumper crop
this year – provided farmers can grow to strong yields and to malting
Malting barley "is likely" to prove "the most attractive spring
cropping option in 2014", as long as growers "match variety to market demand",
said Openfield, the UK's largest agricultural co-operative.
Growers providing barley for Scottish distillers, whose prosperity
is driving their quest for grain into northern England and East Anglia, can
achieve gross margins of approaching £1,400 per hectare on the best-yielding
land, Openfield said.
That is far more than the best-performing spring wheat
growers will achieve, at less than £1,100 a hectare, or spring rapeseed
producers, who can expect less than £1,000 hectare.
'Potential uplift is
The analysis comes despite a huge production surplus of
barley overall for 2013-14 - at some 1.6m tonnes for all types, twice the usual
excess - after a harvest which reached a 15-year high, boosted by a jump in
sowings on land left vacant by a rain-disrupted autumn planting programme.
David Leaper, the Openfield arable technical manager,
acknowledged to Agrimoney.com that prices were "looking challenging" for feed
However, the spread of demand from distillers, and the
introduction of varieties such as Limagrain's Odyssey which promises to offer
both quality and yield, bode well for farmers with land capable of ensuring the
low nitrogen levels needed in malting supplies.
"Most spring crops will deliver a broadly similar gross
margin if average yields are the best that can be achieved, but where the crop
is pushed the potential uplift is significant, especially with malting
barley," Mr Leaper said.
"There is an upside with malting barley that is not
available for crops like rapeseed, where the downside looks greater too."
The analysis is based on prices of some £140 a tonne for barley
for September delivery with a malting premium of £15 a tonne or more on top.
However, the returns looked less appealing for growers
capable of growing only feed barley, or of less strong yields, with spring-grown
feed barley to achieve a gross margin of only a little over £400 per hectare,
below that of oats or wheat, or of other alternatives such as beans or linseed.
"I fear that there will be English growers growing for the
distilling market, in a belief that they will be able to meet the target
quality specifications because the 2013 harvest produced low nitrogen samples,"
Openfield barley trader Adrian Fisher said.
"You only have to go back to 2011 when nitrogen levels were
up around 1.8-2.0% to see how the season can influence performance.
"That year, England ended up with a big heap of high
nitrogen malting barley with reduced outlets."
Fall, but how far?
In fact, UK spring barley plantings are expected to show a
sharp decline from the unusually high 2013 levels, after largely benign seeding
conditions for winter crops, meaning that far less land is left vacant to sow.
However, estimates for the extent of the decline vary.
A survey by the Andersons Centre put the area at 534,000
hectares, down 40%, and a little below the sowings in 2002 and 2010 which
followed years with large spring barley plantings.
However, malting barley trader Evergrain pegs sowings at
about 600,000 hectares, closer to average levels.
Evergrain estimates the UK malting barley surplus in 2013-14 at 457,000 tonnes.