The Agricultural and Horticultural Development Board (AHDB) has confirmed that malting barley premiums continue to rise in the UK.
For the week ending January 4, the UK spot ex-farm malting barley premium came in at £78.40/t, relative to feed barley.
This is the highest recorded price gap for the 2023/2024 season, up to this point.
According to AHDB analysts, it can be expected that premiums will remain strong, at least in the short-to mid-term.
Malting barley
Barley production this season was down 5%, and AHDB’s Cereal Quality Survey showed lower specific weights and screening levels compared to the previous season.
Due to the poorer quality of the domestic crop, in AHDB’s latest supply and demand estimates, imports are expected to be above the five-year average at 87kt.
However, total availability is still expected to be down slightly.
Meanwhile, despite the ‘cost-of-living crisis’, domestic human and industrial consumption of barley this season is forecast to remain steady and in line with last season, at 1.985mt.
This is largely due to expectations that demand for distilling will remain robust from increased capacity coming online last season.
For the July to October period of 2023, total UK barley usage by brewers, maltsters and distillers is up 1.7%, year-on-year.
Longer-term, the strength in premiums will depend largely on the UK’s 2024 domestic barley crop.
AHDB data on barley
As it stands, in AHDB’s Early Bird Survey, the total barley area is forecast to rise 4% year-on-year, with a climb in spring barley planting intentions outweighing a loss to the winter barley area.
However, continued wet weather since the survey was first carried out, means many farmers may not have been able to plant what winter crops they had intended.
Therefore, it could be that we see an even larger spring barley area than initially estimated, due to a lack of winter drilling (subject to seed availability).
Similar patterns are projected for top European growers, France and Germany.
In this case, as long as spring and summer growing conditions are favourable, heavier supplies next harvest could weigh on premiums longer-term, though demand will remain a watch point.
Significantly, the tone of current AHDB barley production forecasts seems to take little cognisance of a possible spring seed shortage this year.
This is in total contrast to the situation in Ireland, where predictions of a distinct shortfall in spring barley seed availability have been widely profiled over recent weeks.
The result of a spring planting survey, canvassing Irish growers’ intentions in 2024, will be unveiled at the Teagasc Annual Tillage Conference, taking place at the end of this month.
