Winter malting barley growers are advised to secure a good buyback contract to protect their margins when purchasing seed for the new season.

Maltsters are reducing their intake of winter barleys, which produce brewing malt, in favour of spring varieties that suit the distilling market, says Stuart Shand, sales director at Gleadell Agriculture.

The trend follows more than £1bn of investment by distillers, which is ramping up whisky production, he explains.

“Scotch whisky output hit a record £4.3bn in 2012, an increase of 87% over the past 10 years. Distillers can’t get any more barley malt out of Scotland, so they are now looking south. The only way they can secure supplies is to pay more.

“Given the much better margin on offer and the fact they only have limited capacity, English maltsters are increasingly looking for spring varieties,” says Mr Shand.

Falling beer consumption is compounding the swing away from winter types, he adds. “UK beer sales were down 2.9% in the first quarter of 2013 compared with the same period in 2012, according to the British Beer and Pub Association. This reflects the trend seen in recent years, which has seen demand for winter malting barley decline from 660,000t in 2002 to just 390,000 in 2012.”

Nevertheless, winter malting barley remains a key choice in many rotations, he says. “Many growers want to stick with the crop. Good margins can still be achieved and it has several agronomic advantages too.”

Based on a Jan ’15 futures price of £163/t and assuming a yield of 6.7t/ha, a winter barley crop stands to deliver a net income that exceeds a second feed wheat crop by £70/ha or more, says Mr Shand. In addition there are other benefits across the rotation that can produce additional financial gain, he maintains.

“Winter barley provides an excellent early entry for oilseed rape. The benefits of this were very clear this season – the difference between early and late-sown rape crops has been like chalk and cheese.”

Winter barley also spreads drilling and harvesting workloads, reducing the pressure in catchy seasons and improving the chances of achieving better yields and quality of other winter crops, says Mr Shand.

Growers should seek out a contract that protects them from the vagaries of a potentially tough market, he advises. “Despite the decrease in demand for winter varieties, Gleadell’s close relationship with the UK’s maltsters and brewers means we can still offer a number of competitive winter barley contracts for the new season for a range of varieties across all UK regions.”

The main variety on offer is SY Venture, which gained full approval for brewing use by the Institute of Brewing and Distilling (IBD). Cassata is also available.

SY Venture is the highest-yielding fully approved winter malting barley on the 2013/14 HGCA Recommended List, says Mr Shand. “It has UK treated yield of 101% of controls, and grain quality is high, scoring a specific weight of 69.7kg/hl,” he adds. The variety is resistant to barley yellow mosaic virus and has good lodging resistance.  

Contract options include premium-over-futures, non-defaultable pool and fixed-price terms. With the premium-over-futures option, growers fix the premium at the time of sale but can choose the base price at any time over the duration of the contract.

“This latter element is based on wheat futures and is transparent and always available, unlike the malting barley market when at times when there may be no buyers,” says Mr Shand.

The pool option is available for Gleadell’s standard pool marketing periods for barley – Harvest (Aug-Sept), October–December and January–March. This contract is non-defaultable in terms of quality, though tonnage must be supplied as feed where quality fails, he explains.