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The UK malting barley and the CWB’s PRO surprise

-Tuesday September 12, 2000



Malting barley markets both in the UK and internationally are far from being a write off. This comes as a pleasant surprise with most grain markets, most places, heading for the South Pole.

Getting early samples off the combine to the offices of local grain merchants, usually for testing rather than immediate sale, is the first real test of the market for most British farmers.

With just five acres of a spring seeded malting barley variety in the bin followed by rain stoppages, there were no excuses last month for delaying what was expected to be a rather depressing round of visits.

The real purpose of these is to get germination, nitrogen and bushel weight tests, to assess whether the grain will meet malting requirements and the extra care required to preserve malting quality will be worth the expense. With the high cost of diesel fuel this year combining has been delayed until after lunch and grain has lost the moisture picked up from over night dew.

A visit to the Canadian Wheat Board’s(CWB) website to find out what the CWB’s Pool Return Outlook (PRO) are for the coming year is another required visit. It normally provides only the solace that Western Canadian farmers’ have even greater marketing challenges than their UK counterparts. For malting barley UK ex-farm prices have in recent years been not too different from the PRO’s. The big difference is that Prairie farmers face substantial deductions for transportation and handling.

The expectation was that the PRO’s would be below even the modest price expectations which had been confirmed by the visits to the local merchants.

But for a change the news at the CWB’s website was good. The mid point of the range for special select 2-row barley was fully £15($35) per tonne above what the local merchants were talking about. Further investigation revealed that the French market for malting barley was £10 per tonne above a year ago and more in line with the CWB’s expectations.

Prospects also have been enhanced by wet weather in Scotland which has delayed the harvesting of spring barley and probably downgraded quality.

Armed with satisfactory quality, the marketing strategy will be one of waiting. This is not without risk as the malting barley market is well above that for feed barley which sits on the European Union’s intervention price floor. But the prospects appear positive.

Just a few more phone calls to make. To the merchants to let them know the barley is still available. There is no point in telling them the bids appeared out of line. And to the bank manager to let him know of the revision to the cash flow plan.

All this may seem like a lot of hassle for little return for those used to marketing through the CWB, but you have a little control over your destiny which is satisfying at least when the market seems to be heading in the right direction.

September 12, 2000

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