As I write, on 8 July, the UK harvest has started, with winter barley combined in the far east and west and some oilseed rape in Kent. It’s too soon to comment on yield, but if it’s as good as the 50% plus of winter barley harvested so far in France we will be OK. There, yields are average to good but grain quality is excellent, with full barley achieving 90% retention on a 2.5 sieve, nitrogen in the 1.60 to 1.80 range.
The UK winter barley has had similar weather patterns, so this augurs well for us. Our southern spring barley crop has had a more difficult growing season. Early sown on the chalk, some barley looks as good as it ever could do, with big ears and increased grain sites hopefully compensating for fewer plants.
Later planted springs germinated more unevenly, so will produce later greener secondary tillers. These crops may not achieve malting because of uneven ripening. In some cases growers won’t be able to wait for the whole crop to reach maturity. Others will wait, as they may want the secondary tillers to augment the crop, but green or thin grain will spoil samples for malting. That shouldn’t matter as we will have a large surplus of usable malting barley.
As before, Openfield has a good programme of malting barley exports starting in September and going through until March 2021. Despite the easing of lockdown restrictions, it will probably be some time in 2021 before we see anything like a return to normality in beer sales.
UK demand for malting barley is estimated to be 400,000 tonnes down, but no-one really knows. In April, UK malt production fell by 25% and in May it was 27% down. With French winter and first springs being reasonable quality there will be plenty of malting barley to compete with the UK for the German malting market. Also the French and Danes have no restriction over shipping by the Brexit deadline of 31 December, so it’s not surprising that malting premiums in the south for brewing, export barley, max 1.85 nitrogen, are only £5 to £10 per tonne.
Clearly, being able to ship from Sheerness, Portsmouth, Portbury, Sharpness – with normal blending opportunities – is more comfortable for growers than playing ‘Russian Roulette’ with individual lorries trucking 160 miles east and perhaps risking rejection for quality issues that could be dealt with simply when loading vessels.
In the bigger picture there are no known weather issues in any major producing areas in the northern or southern hemisphere, but I hope that’s not going to be a case of ‘famous last words!’ Russia and the Black Sea seem to have avoided the ‘summer drought’. Australian wheat production has rebounded from last year’s low of 15.2 million tonnes to an expected 26.7 million tonnes. This alone is offsetting the lower EU production, which includes the UK. They have the, sometimes tricky, months of August and September to negotiate, but there is plenty of rain falling in the east and west just now.
This time last year American maize was the big concern, but not this time, with all the ‘prevent plant’ areas re-instated. Until the last USDA report, record crops were again forecast and the hedge funds had sold a small matter of 30 million tonnes of futures short! However, a confirmation of reduced plantings (with increased old crop stocks) surprised everyone by knocking 17 million tonnes off the expected surplus. To put that in perspective, that’s not so much when you are talking about over one billion tonnes of world production, but it caused the hedge funds to rush in and buy back one third of their shorts.
There is supposed to be some very hot, dry weather coming in the next month; just when the crop is pollinating. Add in rumours that China has already bought 70 cargos of maize from the USA and Ukraine five million tonnes and you have the makings of a maize story which will feature in this column next month.
International feed barley seems more straightforward. France is now enjoying the revival of selling big boats to China, without competition from Australia, and has a good forward shipping programme. The UK will be tendering for the Saudi business, but the last one million tonne order was supplied by the Black Sea at an equivalent of £110 per tonne ex farm, so it’s pretty competitive. Some North African countries are estimating up to a 60% reduction in total crop size, so that still looks like the most likely destination for UK big feed barley boats.
As far as wheat goes, the UK has to wait and see what the quality profile is of harvested wheat. That will dictate whether our millers need to launch into the pre-31 December market to import more quality wheat or make maximum use of our home grown wheat, which they would prefer to do. For now, because of our need to import anyway, forward values are still stable, with feed at about £160 and milling premiums at £25/£30. If you want to risk selling some, you probably have the highest ex farm wheat price in the world, for now.