Pass rate and price differential key to making malting barley more profitable

The 2019 Teagasc e-profit monitor data placed spring malting barley as the second most profitable crop after winter wheat.

This was in a comparison with feed crops including: winter wheat; winter and spring barley; winter oats; and spring beans.

“The combination of having a good yield, getting a good bit of malt across the line rather than going for feed and having a good differential [in price] between feed barley and malting barley has made the net margin considerable,” according to Eoin Lyons, who is the adviser on the Teagasc/Boortmalt joint programme.

He added that the goal of the three-year programme, now in its second year, is to make malting barley as profitable as winter wheat and to get crops over the line.

A larger percentage pass rate is required in order to bring profitability in line with winter wheat.

The Teagasc adviser noted that taking soil samples and having a nutrient management plan in place is one step which farmers can take to increase their chances of barley passing for malting.

Eoin also noted that the results come with a caution and that is that less e-profit monitor data was available for 2019 profit monitors and those who were included had a high pass rate at intake.

That said, when comparing the three years it was clear that an increase in both yield and price contributed to the improvement in profits from malting barley, but a higher percentage pass rate is required in order to bring profitability in line with winter wheat.

The net margin for winter and spring cereal crops, as well as spring beans over the past three years, can be seen in the graph below.

Image source: Teagasc

In 2018 and 2017, spring malting barley was the fourth and third most profitable crop, respectively.

In 2018, winter barley, winter wheat and winter oats were the top three most profitable crops, while in 2017, winter wheat and winter barley worked out best profit wise for farmers.

Demand for straw added to an “exceptional” profit for winter barley in 2018.

Eoin commented that there wasn’t a huge difference between feed and malt again in 2018.

“Look when you take the price, the differential was there on price, but it’s the amount of malt that got over the line. That’s where the big difference in 2018 was. There were a lot of rejections.

If you’re growing a malt crop and 50% goes for malt, 50% for feed, the price is then diluted because you’re carrying half of that crop as feed.

On 2019, Eoin commented that spring malting barley was second to winter wheat, but was ahead of winter barley.

“That’s an encouraging sign that there is a differential [price] there between feed and malt and it is helping the net margin.

“Look, malt is still second to wheat, but it has come a long way compared to 2017 and 2018. It is encouraging, but there’s more to go on that.”

Yield data

2019 was the highest yielding of the three years examined and it will be no surprise to anyone that crops yielded lowest in 2018.

Over the three years spring malting barley reached yields of 7.8t/ha (3.2t/ac), 6t/ha (2.4t/ac) and 8.12t/ha (3.3t/ha) in 2017, 2018 and 2019.

Image source: Teagasc

Concluding and putting the comparison with winter wheat into some context, Eoin stated it’s important to note that not all soil types are suitable for both winter wheat and spring barley and that high winter wheat yields are often recorded after a break crop – when grown continuously this may not be the case.