E-Malt. E-Malt.com News article: South Africa: Malting barley production falls short of AB InBev’s mandate

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E-Malt.com News article: South Africa: Malting barley production falls short of AB InBev’s mandate
Barley news

South Africa’s malting barley production fell 95 000 tonnes short of Anheuser-Busch InBev’s (AB InBev) 360 000 tonne-mandate during the past season, due to farmers rather planting crops with lower risk, such as canola and wheat, the Farmer’s Weekly reported on February 1.

“Barley production is at an all-time low. We need a turn-around strategy to make it attractive to farmers again,” José de Kock, chairperson of Grain SA’s Barley Industry Committee, said during the organisation’s recent regional annual general meeting in Rietpoel, Western Cape.

He said drought conditions negatively affected yields in the Swartland and Southern Cape regions between 2017 and 2019, while COVID-19-related bans on the sale of liquor that started in 2020, resulted in a surplus that was 49% higher than the previous year.

AB InBev lowered its intake in response, from 475 000 tonnes to 365 000 tonnes, which farmers struggled to reach because of various challenges.

De Kock explained that Swartland farmers only produced 6 000 tonnes of their 22 000 tonne-mandate, because of a stand-off between AB InBev and silo companies over the storage of barley.

Farmers who took the risk of planting barley ended up having to transport their crops from the Swartland to the Southern Cape region.

“AB InBev is in negotiations to address the issue, which will hopefully be resolved before the next planting season starts in April,” he added.

In the Southern Cape regions, cold conditions at the start of the season negatively affected plant biomass, leading to lower yields compared with wheat, resulting in the region not reaching its 269 000t-mandate. The situation was exacerbated by rainy conditions during the harvesting period.

“It was a challenging season. A lot of barley was downgraded to feed-grade because of low nitrogen levels,” De Kock said.

Manfred Venter, head of agriculture at AB InBev, said the company would like to increase its mandate by another 62 000t between 2025 and 2027, and that the company was in the process of addressing past mistakes by working on customer relations and communication with farmers and storage companies.

Another challenge was the ‘brain drain’ that followed AB InBev’s take-over of SA Breweries in 2017, he said.

“Long-term storage agreements are a high priority for us, as we realise it is counterproductive to only work on annual contracts with storage companies. A lot of effort is also placed on lengthening staff turn-around times,” Venter said.

Richard Krige, vice chairperson of Grain SA, called on AB InBev to stop forcing farmers to only use certified seed.

“Farmers have been saving seed for years to reduce input costs, so let’s work on a solution that will allow us to continue this practice without negatively affecting malting barley quality.”

In addition, Krige asked for pre-harvest samples to be taken to identify problems before they occur, and for industry role players to share information in real-time, to help industry members make better decisions.

De Kock said AB InBev had been investing in new talent and improved communication with farmers over the past year, but said the company and other role players in the supply chain, such as seed companies, co-operatives, silo suppliers and logistics companies, would have to attend barley industry committee meetings to ensure the long-term sustainability of the industry.

02 February, 2022

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