Malting barley is likely to remain the most attractive spring cropping option in 2014, but growers must match variety to market demand.
An analysis of gross margin performance of the spring cropping options suggests malting barley has the potential to deliver the greatest return as long as growers can achieve above-average yields.
Aberdeen Grain general manager Bruce Ferguson, who is also Scottish manager for farmers’ co-operative Openfield, said: “Most spring crops will deliver a broadly similar gross margin if average yields are the best that can be achieved, but where the crop is pushed the potential uplift is significant, especially with malting barley.
“It is also a lower-risk crop compared with alternatives such as spring oilseed rape and, while spring oats can also do well, they don’t have the same potential to deliver because even at an average yield spring barley’s gross margin is still competitive with these crops.”
The analysis uses yield data published by ADAS and futures prices for November 2014 to give a fair comparison. Because malting barley is a fairly robust crop and most growers have experience of managing it the risk of a poorly yielding crop is lower than some other crops, most notably spring oilseed rape which can be fickle to manage.
The superior performance of malting barley is due largely to the introduction of higher-yielding types such as Concerto and Propino, which have posted yield gains ahead of that delivered by others.
This advantage is likely to be increased by the recent approval of Odyssey, the highest yielding variety on the 2014 HGCA recommended list to have full approval for distilling.
“Odyssey has performed well in initial trials carried out by distillers and we are expecting good demand,” said Mr Ferguson.
“Concerto is by far the dominant variety in Scotland due to its good spirit yield which makes it the preferred distilling variety.
“Optic retains limited appeal, however, as a means to spreading variety risk and it doesn’t have the skinning issue of Concerto, but we expect to see Odyssey compete strongly once end-users have seen larger commercial tonnages both north and south of the border.”
While distilling has previously been the preserve of growers in Scotland, some end-users have begun sourcing from England, primarily as a means to meet increased demand, but also as a consequence of insufficient Scottish malting capacity.
Openfield barley trader Adrian Fisher, however, urges caution when selecting varieties.
He added: “I fear that there will be English growers growing for the distilling market, in a belief that they will be able to meet the target quality specifications because the 2013 harvest produced low nitrogen samples.
“You only have to go back to 2011 when nitrogen levels were up around 1.8-2% to see how the season can influence performance. That year, England ended up with a big heap of high nitrogen malting barley with reduced outlets.”
Failure to meet the nitrogen limit of 1.65% can have costly implications, he warned. “Holding back on nitrogen means that the distilling crop will be inherently lower yielding than a brewing crop which is why the premium is greater. But miss the maximum nitrogen limit and the likelihood is that the best you can hope for is a lower-yielding feed crop.
“This reinforces the importance of matching variety to soil type and growing regime. Unless you can be certain of meeting the 1.65% nitrogen limit, then you should opt for Propino or another IDB-approved brewing type.”