As beer consumption falls, coupled with higher prices for New Zealand barley, breweries require less malt and malting companies less barley.
Marton-based malting company Malteurop NZ operations manager Tiago Cabral said New Zealanders’ drinking habits were having an impact on the company.
With less demand for malt, Malteurop would not require the same volume of malting barley, Cabral said.
“Our contracts for malting barley are definitely down in volume for the coming season, so growers can expect less malting contracts.
“But we will be working with growers to minimise the impact.”
The company would probably offer less per grower and that way lessen the impact across the board, he said.
Malteurop NZ contracts 250 growers to supply up to 50,000 tonnes of barley. Globally 2.2 million tonnes of barley is grown for the company.
Sixty-five per cent of domestic barley is grown in Canterbury, with the remaining 35% from Hawke’s Bay and Rangitikei-Manawatu.
Most all the beer made in NZ was made from NZ malt product, with 90% of malt production supplied to the domestic market, Cabral said.
“We are very committed to use NZ barley. Our brewers want it.”
It was difficult for the company to export because NZ barley prices were not competitive in the international market, he said.
“On the international market, especially European and Australian barley prices are much lower than NZ.
“The big cost for us when making malt is the barley. What makes the prices high is the raw material and the value we add is quite marginal on the international scene.”
Federated Farmers South Island grain and seed vice-chairman David Clark did not expect the malting barley contract offering to have a significant impact on growers.
It would mean less malting barley but options for growers this season were looking brighter, he said.
Going into next year’s harvest with virtually empty silos meant significant land-use change over recent years was finally starting to filter through, he said.
Competition for land use was not just from conversion to dairy but from feed crops, cereal, and seed multiplication crops.
Those empty silos, compounded by below-average yields from this year’s harvest and enthusiastic buyers, painted a positive outlook for next year’s harvest, he said.
Stocks were back to a more normal level after the bumper harvest last year, with almost half the tonnage of wheat and barley unsold than at the same time last year.
The latest Arable Industry Marketing Initiative (AIMI) survey estimated 44,000t of feed wheat was unsold on July 1, compared to 100,000t the same time last year.
For feed barley there was 44,000t unsold, compared to 68,000t last year and 113,000t in 2012.
“What we are seeing is that buyers are using the AIMI survey to make informed decisions and getting on and buying,” Clark said.
“On-hand grain is finding enthusiastic buyers, both in traditional end users and the dairy industry.”
The shocking autumn’s wet conditions had delayed or prevented the planting of autumn cereal.
While the surveyed planting intentions for next year’s harvest show an 18% increase in the area of feed barley planting, that was at July 1 and some farmers might be looking now at other options, he said.
“Remembering here that spring plantings will yield less than autumn grown, so despite a similar area of planting being predicted the spring sowing will impact on the total tonnage of the harvest.”
In some areas the ground was still too wet to sow spring cereal, he said.
In the past two weeks there had been good activity in the market as farmers considered spring contracts for crop options.
“There are some really good contracts for peas and some attractive options for vegetable multiplication contracts.
“We have looked at the bigger-than-expected barley crops and compared this to more attractive options and here some of our intended barley will now go into other crops.
“So it is not a given we will end up with more feed barley.”
With an El Nino predicted for spring it was a long way to harvest yet, he said.
“Meantime, yes, there are really good options for farmers to look at this season and growers will be looking at the numbers and what it means for their own business and making informed decisions.
“Demand for pulses in the northern hemisphere, less area available for arable and enthusiastic marketing of crops overseas by firms is all boding for a positive season ahead.
“We are cautiously optimistic but the weather will determine.”
