E-Malt.com News article: 3916

United Kingdom, Scotland: Arable farmers have again warned that, unless prices improve, they will stop growing barley for malting, leaving beer and whisky makers with a supply problem. It has become almost a "boy cries wolf" warning over the past few years, but John Kinnaird, NFU Scotland president, believes that this time growers mean it, Scotsman Business revealed on December 29, 2004.

The deciding factor, after another year of low prices and mediocre premiums for malting above a feed barley price in the low £60s, could be changes to Europe’s common agricultural policy.

From January 2005, farmers will get a single annual support payment instead of a range of crop and livestock production subsidies and Kinnaird believes that if a specialist crop, such as malting barley, does not earn a decent premium, growers will drop it. He told journalists last week: "At this stage I’m unlikely to sow malting barley next spring and that will be a first - our family has been in the farm a long time and I can never remember when we haven’t grown it. "It’s not that farmers don’t want to grow malting barley, but the trade can’t come up with a price and say that’s what you will get."

However, he refused to be drawn on what that price might be, although the average cost of production has been estimated at £75 per tonne. A few years ago the NFU set a "£90 a tonne or bust" target, pointing out that such a price level only contributed a few pence to the cost of a bottle of whisky. But an average price anywhere near that has only been achieved once since the mid-1990s.

The weakness in the NFU argument is that in spite of that, about 1.4 million tonnes of potential malting barley has still been grown each year for maltsters who only want 600,000 to 800,000 tonnes and while there is world over-supply. But this time Kinnaird insists that they mean it and maltsters and grain merchants only have a month to come up with the offer of a decent price: "We have to know by then because spring barley seed could be in short supply for us. "It’s time the malting trade woke up to the threat of short supply for them." He added: "Farmers can’t use the single farm payment to subsidise loss-making parts of the business. That approach has no long-term future."


29 December, 2004