Global ending stocks of barley have continued to fall, data from the United States Department of Agriculture shows. Since the majority of global barley production goes to the animal feed industry - China in particular continues to purchase a lot of product - this tight stock is especially problematic for the beer industry.
The latest figures from the US Department of Agriculture (USDA) indicate a global barley production of 145,7 million tons. That is approximately 1,5% lower than what was expected one month ago. Analysts then expected a harvest of just over 147 million tons. The closing stock drops to 16,6 million tons, compared to 17 million tons last month. In other words: the shortage of barley continues to increase. The good news is that consumption is also slightly lower, at 150 million tons. The majority of the barley produced goes to the animal feed industry.
The European Union, Russia and China are the major consumers. Our continent is expected to consume 46,5 million tons this season, which is slightly less than the previous forecast of the Ministry of Agriculture. Russia consumes 13,3 million tons and China 13,4 million tons. The Asian superpower is therefore showing a growth of 400.000 tons compared to previous expectations. This shows that the build-up of the country's livestock population has not yet ended. The decline in world consumption is reflected in the quotation for EU feed barley in Rotterdam. In week 4 the quotation was €280 per tonne, in week 6 it is approximately €265 per tonne.
Higher costs for the beer industry
A lower price at EU Rotterdam does not mean that beer producers can obtain (brewing) barley cheaper. Precisely because the demand from the animal feed industry is currently so high and the good prices paid there, there is even less product left for the beer industry. The quotation for malting barley in Mannheim recently rose to €412,50 per tonne. That is an absolute record. These high raw material prices must be passed on. "It is now escalating considerably," said Wilco Heiwegen, spokesperson for AB InBev. “All our costs are higher.”
Malting barley is, as described, essential in the production of beer. However, Heiwegen does not expect beer production to suffer in the short term from the limited supply of malting barley. "In theory you can also make beer from other grains, although that is a real experiment for us. So we don't do that. But I don't think it is necessary either. The markets are volatile and it is exciting to see which way things go. "But I don't foresee any major problems for now."