Friday, November 11, 2011

2011 barley harvest down; 2012 beer prices up?

There's bad news for brewers worldwide, and beer drinkers. From (a website for agricultural business and commodities news):

Malting barley is expanding its premium over wheat amid waning hopes for world supplies, with wet weather holding up Canada's sowings and drought denting prospects in Europe, where the UK set for its weakest harvest in more than 40 years.

The UK's Home Grown Cereals Authority has forecast that, even with benign growing conditions from now on, "overall malting barley availability is likely to be tight in 2011-12".

Contrary to often overwrought hang-wringing over hop availability and its effect on beer pricing, it is barley —specifically barley for malting, which, at lower yields, costs more than 'feed' barley— that, with water, is the primary ingredient cost of beer.

Devils' malt (01)

According to Agrimony, whereas Scotland had a bumper barley crop (most of which will go to its native whisky distilling business), most of the rest of the world did not. Including the UK and Canada (the principal supplier to the US brewing industry), harvests were low in Australia (a major barley exporter, but where many farmers have switched to wheat), Russia and Ukraine (a late spring sowing season), and France (drought). Exports may increase from Argentina, but will not be enough to offset the worldwide harvest deficits.

Whenever the price for malting barley increases, it's the smaller breweries that pay much more than the conglomerates, lacking the latter's purchasing power. If the bleak predictions hold true, scarcity will increase pricing and, it follows, decrease availability.

On Twitter, Massachusetts Notch Brewing noted that its English malt supplier has announced that Maris Otter malt will not be available per se, but blended with Spring barley, and at a higher cost. Maris Otter is an 'heirloom' variety of 'winter' malting barley, often floor-malted, and regarded by traditionalists (including me) as one if the best malts for its flavor and low nitrogen levels (less haze in cask beers). Even without a bad growing season, Maris Otter is already low-yielding, and not grown by many farmers.

The price for 'craft' beer at the consumer level has continued to increase (2.64% already this year, according to the Brewers Association), despite the ongoing economic downturn. Anticipate a bigger jump in 2012.

Most breweries adjust their pricing in January or February. Buy those 'imperials' and barleywines ... now.

1 comment:

  1. I would have more faith in the relationship between barley prices and craft beer if I ever saw a price decrease based on the wholesale cost of inputs like barley.


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