UK: Demand for barley from brewers, maltsters, and distillers starts the season strongly, AHDB says
Demand for grains from the compound animal feed sector, including Integrated Poultry Units (IPUs), started this season (2023/24) sluggishly, just as it ended last season.
However, more barley was used to make compound feed in July and August than the same period last season. Meanwhile, demand for barley from brewers, maltsters, and distillers (BMDs) has started the season strongly. Depending on the UK crop size, if these trends continue, they could squeeze the UKs barley availability for export, AHDB said in its latest report on September 28.
Animal feed makes up 54% of total grain demand in the UK (five-season average) so the trends have a big impact on average UK supply and demand.
So far this season (July and August), barley is accounting for a bigger proportion of the grain being used to make animal feed (combined GB compounders and IPUs). This continues the pattern from the end of last season (2022/23) and may reflect the timing of the 2023 harvest.
Demand for malting barley started this season strongly, even more so that last seasons strong usage levels. The amount of barley used by BMDs was up 7% year-on-year in August and 4% above the five-year average for the month.
In 2022/23 the total amount of barley used by the human and industrial sectors totalled 1.98 Mt, the highest in our electronic records back to 1999/00. While theres still a long way to go, if the strong start to demand by BMDs continues, it raises the prospect of could demand surpass 2022/23? Supporting this prospects is that capacity increases are now online. However, the rise in spot malting barley prices due to the wet harvests across Europe and tight global barley supplies means its not certain.
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