Coronavirus reduces malting barley usage: Grain Market Daily

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Today was the release of April’s human and industrial and animal feed usage figures. This is the first full month of data showing the implications of the Covid-19 lockdown.

Barley usage for the brewing, malting and distilling sector in April was just 114.7kt. This is the lowest figure in over a decade. The last time that barley usage for BMD fell below 120kt in a month was August 2009 when just 111.5kt was used. April’s figure is 28% lower than the same month in 2019.

This sharp decline in usage was likely driven by the fall in demand into food service due to lockdown. There have been reports of some maltsters reducing production levels due to the current pandemic. Likewise, it has been reported that some distilleries have pulled forward scheduled closures. With current indications suggesting no reopening of pubs and restaurants before 4 July, it is likely that we will continue to see this reduced demand for the rest of the 2019/20 season.

Taking this reduced demand into account, the May balance sheet estimate has total barley human and industrial usage for the season at just 1.813Mt, 117kt lower than February’s estimate and 4% lower than the previous 5 year average. If realised, this would be the smallest usage since 2010/11. Not good for a large production year and likely to weigh on barley closing stocks which are currently forecast to be the largest since 2015/16.

Looking forward to the 2020/21, it is still largely unknown when food service will be back up and running, and at what levels. With these levels of usage looking likely to continue for the coming months, a large spring barley area combined with timely rains forecast across much of the UK means the outlook for malting barley looks set to remain pressured.

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