World demand for malting barley is growing, but farmers need a premium to make it worth their while.
“The price of malting barley has to be at a level where farmers say it is worth growing,” said Tim Stonehouse, group malt sales director for Muntons Malt in the United Kingdom. Muntons is one the top five maltsters in the U.K.
Stonehouse’s company pays a premium of about $40 Cdn per tonne over the feed market, which British farmers have responded to by growing more.
He told the Western Barley Growers Association’s annual meeting in Calgary Feb. 14 that companies will have to work more closely with farmers to ensure supply through contracts and premiums.
The U.K. produces 1.6 million tonnes of malt for beer and whiskey production, which requires two million tonnes of barley. He doesn’t believe England and Scotland can grow more.
The world’s cereal grain stocks are at critically low levels, and malt production is also falling behind.
Stonehouse estimated a growing world population and increased beer consumption means an extra 500,000 tonnes of malt will be needed every year.
Global beer production required 20 million tonnes of malt in 2010, which was derived from 25.6 million tonnes of barley. Stonehouse predicts the world will need 30.9 million tonnes of barley by 2020 to meet world demand.
North America produces 33.3 billion litres of beer. Canada has a surplus and the United States is in balance.
Australia makes 2.3 billion litres and has a malt surplus.
China produces 45.5 billion litres and has a surplus of malt.
Europe makes 54.2 billion litres and is also in surplus.
Asia makes 14.2 billion litres of beer but does not grow barley.
Africa makes 10.2 billion litres and needs to import malt. However, enzymes and other cereals are often used to make beer without malt barley. They are likely to want better beer as their economies improve and will need malt.
South America produces 22.3 billion litres and is in deficit.
Growth in beer consumption has been strongest in China, Brazil, Mexico, Vietnam and Thailand.
A breakdown of per capita consumption shows Canadians consume 70 litres each but Bavarians drink 300 litres and Czechs drink 160 litres per year.
Stonehouse said beer made without malt should be labelled differently so consumers know what it is.
Brewing recipes have never established a definition of beer, unlike the whisky and cheese industries.
Many large companies do not protest because they believe consumers will switch once they can afford beer with malt.
“If more people in Africa have access to a product or a beer type, that is not a bad thing because that develops a beer culture, but I want people to know there is a difference,” he said.