There will be enough malting barley for beer and whiskey production, even with a reduced crop in FY2023/24

RMI Analytics said in a new report that malting barley harvested will be enough to meet the needs of beer and whiskey producers, even with a reduced crop in 2023, as demand for beer will also decrease significantly compared to 2022. And demand for feed barley will decrease due to increased offers of cheap corn.

World production of barley in 2023/24 MR decreased compared to the previous season by almost 10 million tons, and ending stocks - by only 2.2% due to reduced consumption.

The supply of quality malting barley will meet the needs of brewers and whiskey producers until the harvest of 2024. Against the backdrop of high harvests from 2019 to 2022, demand for barley has fallen to a 10-year low. Thus, the export of barley from Europe in 2023 decreased by 10% compared to 2022, and by 4% compared to 2021. Therefore, there is a risk that in 2024 farmers will reduce the area of barley sowing.

Analysts expect a continuation of the downward trend in malting barley prices in the near future. In 2023, the premium for malt quality reached 40-60 €/t, but prices for the 2024 harvest will be significantly lower.

The prospects for the 2024 harvest in Europe are quite optimistic, as temperatures in winter exceeded the norm. At the same time, sowing of spring barley may be delayed due to heavy rainfall.

In Ukraine, the demand for malting barley also decreased sharply against the background of a reduction in export demand for malt and malting barley, which led to the shutdown of the Slavut malt plant for repairs. Other factories almost stopped receiving malting barley, as a result of which its prices fell from UAH 6,000-7,000/t FCA - economy at the beginning of the season to UAH 5,000-5,500/t FCA in February, which is almost equal to the price level of fodder barley.

Considerable stocks of malting barley at processors and uncertainty with sales of malt in the new season limit the volume of purchases, which will lead to the reduction of premiums for malting barley to the minimum values, unless there are some quality problems.