Malting barley supply following the impact of the war…..
One thing that is certain is the impact of the war will have a serious knock-on effect on malting barley pricing. The extent of which isn’t known at this stage of the year. We don’t have the benefit of harvest data yet, but you can get a guide based on wheat futures and its sobering reading. Be conscious that malting barley prices are affected by market forces across the globe. Regardless of where you source your barley from.
Barley pricing is based on many factors. One factor is malting barley is a higher spec and more difficult to grow than feed barley.
The demand for feed barley is high at the moment. Russia and Ukraine account for 18% of global barley production & 30% of global exports. which is a huge share. So when countries look to source their barley it’s impacting the price we all pay. This will also impact the decisions the farmers make on what to grow. A concern is if feed barley becomes limited, farmers will use malting barley. This means pricing for brewers increases due to limited stock.
A key point is that brewers can’t use feed barley to brew with but farmers can use malting barley as feed.
Regardless of where you source your malting barley from there will be an impact. We predict this increased pricing cycle will continue for the next two years at least. There were already contributing factors causing increased prices before the war. Such as the trade war between China and Australia on barley forcing China to source its barley from Ukraine. The impact of extreme weather conditions affects the harvests in many different countries as well.
Malting barley supplies are limited and recent fertiliser and energy increases will also affect pricing. The malting process uses an enormous amount of energy and with wholesale energy costs at unprecedented levels, it’s adding to the perfect storm around malting barley costs. There is also the impact of increased transport costs increasing rates. One genuine concern we would have is that if feed barley supplies become limited and they start buying malting barley for feed it will see pricing for brewers increase further, the key point here is that brewers can’t use feed barley to brew with but farmers can use malting barley as feed.
Securing malting barley supply is now becoming an important factor as opposed to the price of the malting barley. If you look at the geography of the growing areas in Ukraine against the areas where conflict is ongoing it looks to be 20-30% of farming areas being affected and that is likely to affect not just this year but the following as winter barley and wheat that was planted at the end of 2021 and due for harvest this summer 2022 will not be harvested and in turn, the access to seed via the ports isn’t achievable so will have a knock-on affect on planting for future harvests. Will the farmers be available to harvest and will the crop have been looked after and given fertiliser if the farmers had to take up arms to fight the Russians? So many factors that are affecting supply.
Quality malting barley supply that delivers a high spec product has always been a marker that we wouldn’t compromise on at Geterbrewed. Working with our valued distribution partners at Crisp Malt in the UK & Dingemans in Belgium we have secured supply and sell real premium high quality products. This consistent high-quality malt is super important for ensuring your brewery operates smoothly and makes an impressive quality product consistently. Building relationships with our brewers to ensure continuity of supply with a premium quality product is important and why we are communicating the situation to our customers for transparency. We aren’t blending malts or using low-quality malt to offset these increases we will continue to produce and sell high spec malting barley.
Our sales team have been visiting breweries to discuss your needs, we have supply secured at stable pricing for 2022 and will be discussing requirements for 2023 to ensure supply is secured unfortunately we don’t have the full picture until harvest data is available but based on current wheat futures the malting barley increase is going to be the highest we have ever seen and it’s important that we start planning and working together in partnership to ensure supply. Get in contact via email or through the contact us page on the website
