Supply and demand

Supply and demand

Ian Wisniewski looks at the turbulent world of barley.

Production | 08 Sep 2008 | Issue 74 | By Ian Wisniewski

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With production levels rising at various distilleries, the industry accounted for 479,000 tonnes of barley in 2007, compared to 442,000 tonnes in 2006, and 409,000 tonnes in 2005, according to The Scotch Whisky Association.Meanwhile, the price per tonne was £80-90 in 2005, and £90 a tonne in 2006.But after the 2007 harvest prices changed dramatically, soaring to more than £200 a tonne.“After two very poor world harvests, there were no cereal stocks to fall back on.Processors went into 2007 without having enough carry over stock to see them through until the new crop was available for malting.This is usually six weeks after harvest, around the beginning of November, so the price soared as buyers chased what little free market barley was available,” says Dr Bill Crilly of The Edrington Group.Another aspect of supply and demand was a sustained decline in the level of barley cultivated in Scotland.“Prices had been so low that the area of spring barley in Scotland had fallen fairly dramatically, from around 280,000 hectares 10 years ago to around 220,000 hectares in 2007.As you can produce five to six tonnes per hectare that’s a lot of barley not being produced.The area of barley cultivation in Scotland has gone up,we think, to around 245,000 hectares this year, but there is still very strong demand, and it depends what happens during the harvest.There could be too much barley around, but we don’t think there will be enough of an excess to bring prices down, or not by much anyway,”says Simon Barry of Highland Grain, a Scottish specialist malting barley cooperative, which supplies commercial maltings and distilleries.While increased planting in Scotland could relieve anxiety about the future, there’s more to it than that.“Scotland should be able to supply the requirements for malting barley for Scotch Whisky as it is a net exporter.“The problem is that if there’s a generally poor harvest then the EU is looking at Scotland and Denmark, the late harvesting countries with sizeable export potential, to make up the short fall, and that can create severe competition,”says Dr Bill Crilly.Moreover, for distillers it’s not simply a case of buying the required quantity of malted barley, as a particular quality is required.And when less barley is available, and there is also more demand, meeting the usual specification can obviously become that much harder.A vital factor is the nitrogen level, with a typical upper limit for distillers being 1.6 to 1.65%, as higher levels of nitrogen raise various issues.The nitrogen level is a measure of the protein content, and the higher the level of protein, the lower the level of starch, and a correspondingly reduced yield of alcohol.Whether higher nitrogen levels can also result in any differences to the new make spirit is another consideration.“I can’t think of any work being done to see if a higher nitrogen level malt produces a different spirit, and I don’t know of any work that proves it one way or another,” says Dr Bill Crilly.Another factor is how nitrogen levels effect processability, beginning with steeping. A higher nitrogen level prevents the grain from taking up water as readily, which can alter the usual steeping cycle. Higher nitrogen levels also mean the grain is correspondingly harder physically.“A higher nitrogen level malt is more difficult and more time consuming to process. For example, at high nitrogen, there are high levels of gumlike materials (from the protein and cell walls) in which the starch granules are embedded, so mashing and milling techniques would almost certainly have to be adapted to attempt to maintain processability,”says Dr Bill Crilly.The nitrogen level is influenced by various factors, including the climate and soil type.“Light rainfall,between 700-800 mm per year, and light soil tend to promote a lower nitrogen level, and key areas offering this are East Lothian,Borders,Angus and Black Isle, which have fertile,loamy soils that drain well,”says Simon Barry.There are also various stages during the cultivation cycle that influence nitrogen levels.“When sowing a reasonably dry soil is ideal, so that the roots have a lot of contact with the soil and establish quickly.Timing is also important, with March ideal for sowing as the crop is in the ground longer and low humidity in March also helps.However, lately it’s been April when we get lower humidity.Meanwhile, snow, rain or frost can delay the sowing time.Sowing in late April means the plant has less time, and a quicker growing cycle can promote higher levels of nitrogen,”says Simon Barry.Another key time is flowering, when the climate can play a crucial role.“Flowering takes place in late June, early July,we’re looking for dry,warm weather so the flowers open for the shortest space of time, as you can get fungal infections in the flower if it’s cold or wet.This can affect the yield, as some of the grains might not set.After flowering we want warm, humid weather which enables the barley to take up nutrients to fill the grain, starch production really takes place then.Wet weather leaches nutrients from the soil,and a wet, cold summer results in higher nitrogen levels and less starch,”says Simon Barry.The weather is of course a crucial factor during the harvest.As different barley varieties have different harvesting times,by up to seven to10 days, this may help to either avoid, or indeed to experience adverse weather.However, location is another contributory factor, with areas higher above sea level for example being relatively slower to reach harvest time.Very heavy rainfall the week before the harvest can flatten the straws, which could subsequently prevent the combine harvester from picking them up.Meanwhile, a lower nitrogen level tends to result in lighter straws, which are less prone to being flattened.But that’s not the only consequence of too much rain at the wrong time.“Two weeks before the harvest is a really critical period, as hot, humid,wet weather runs the risk of pre-germination, and if it goes too far it will render the crop useless for malting.Rain can delay the harvest and the quality can deteriorate, although delays don’t necessarily mean a higher nitrogen level as the barley should be mature by that stage,”says Simon Barry.In addition to nitrogen levels, other issues also apply when purchasing malted barley.“You can get corns that are loosely or densely packed with starch, which can depend on the barley variety, the terroir, and the climate, as cold, cloudy days, for example, are not ideal and do not favour dense packing, and thus another criteria can be the thousand corn weight.“ Good, heavy plump corns with a low nitrogen level are ideal,”says Dr Bill Crilly.What kind of harvest 2008 yields, and the consequent availability and price of barley remains to be seen.Meanwhile, established relationships between distillers and maltsters have obvious benefits.“Security of supply is a major comfort,and we have a long standing agreement with Simpson’sMalt, which is our exclusive malt supplier.We have similar arrangements with Highland Grain and Lindsays for barley,”says Dr Bill Crilly.Another aspect to consider is provenance.“We try to buy some barley from local farms each year, from Campbeltown to Southend,an area within 10 miles of the distillery, which is distilled as a separate parcel. It’s an extremely limited-edition bottling,marketed as Springbank Local Barley,and we might also put the barley variety and specify the farms on the bottle label.There is definitely extra interest in these bottlings, connoisseurs like this kind of provenance,”says Stuart Robertson of Springbank.So, the barley issue entails various considerations, which naturally raises the question, where do we go from here ?“During the past few years the barley acreage in Scotland has been reducing, maltsters have also either closed malting plants or reduced malting capacity during this period.This has had the effect of reducing supplies of both malting barley and malt and therefore the overall supply is now much tighter.“All of us in the supply chain, farmers, maltsters and distillers are very conscious that we must all work together. It is important that prices are right for everyone on a consistent basis but we must also ensure that we all remain as efficient as possible,”says Roger Woodley of Bairds Malt, chairman of the Maltsters Trade Committee of The Maltsters Association of Great Britain.
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