UK: Anxieties over malt supply are good news for growers
The growth of the biofuels industry is raising concerns among UK maltsters and brewers that it could threaten the long-term supply of malt, says Gleadell Agriculture's sales director, Stuart Shand, The Journal published June 20.
In the last few years, the planted acreage of malting barley has dropped dramatically as farmers have switched to sowing oilseed rape and wheat. However, Mr Shand believes new anxieties about guaranteeing future security of supply is good news for growers.
"Brewers are having to look at longer-term malting commitments, and this is leading to contracts that are more favourable to growers. The contracts are very competitively priced at the moment, and will help secure a healthy gross margin for the crop over the next three years."
Trevor Wright, raw materials director of Simpsons, an independent maltster producing 240,000mt per year for the brewing and distilling sector, said steps must be taken to encourage growers to continue to include barley in their cropping rotations.
He believed biofuels competition was making it easier to bring the pricing situation home to brewers.
"Whereas set-aside has also been a threat in the past, all you could show brewers was the reduced acreage of barley as a result. But with biofuels, it is easier for them to recognise its effect on gross margins," he said.
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