Barley prices appear to be rising fast with some farmers quoting a feed barley price over £190/t, but merchants are reluctant to quote anything above £170/t to £180/t. It seems farmers are taking a gamble and holding off selling in hope of a continued price rise. There are good reasons for and against a continual climb.

While some farmers have been pleasantly surprised about the early cut spring barley, the bulk of the crop has yet to really get going. Earlier-planted crops were established before the weather broke in April which could make a big difference to yield. Merchants report that so far spring barley bushel weights are good, showing that the sunshine did help yield, but yields are back around half a tonne an acre compared with last year, which was higher than usual.

We have to remember that growing conditions for later-sown spring barley were very different from plants which germinated before the weather broke in April. Agronomists point out that later-sown barley had a very short growing season of three and a half to four months. Thirty days’ less growing time is bound to have an impact.

On the other hand, some later-sown crops could be on fitter soil or mixed farms which suffered less in the dry due to higher soil moisture retention.

Another positive will be falling yields offset by increased prices, which look to average £40/t to £50/t more on the year. This would equate to an extra three-quarters of a tonne of barley per acre, which will go some way to mitigate the impact of a dry summer.

Specification for malting barley has opened up significantly as crops have high levels of nitrogen. Farmers in Morayshire this week have told me that barley at 1.85% nitrogen has been accepted for distilling, considerably higher than the usual 1.65% limit.

Contract prices

Contract prices for malting barley are sitting around £203/t and Diageo set the price that pay farmers at £205/t this week.

The price could climb even higher for the spot market. But smaller yields and wider spec will see few loads of barley able to take advantage of any spectacular trade. If only this was possible in other years.

This won’t help farmers who contracted too much grain and don’t have the volume to fulfil. Anecdotally, not many folk are foolhardy enough to sell all the tonnes they usually yield per acre and wider specs should help farmers to avoid rejections. Nevertheless, for those who fall short, merchants may force farmers to buy extra grain to fulfil contracts or buy on the market and charge back the difference.

Those further up the hill may read this with in trepidation fearing winter feed costs, however, prices won’t necessarily continue growing; as maize and wheat prices appear to be levelling, this could cap feed prices this winter as feed merchants switch to other grains.

All will become clear as French and American maize harvests start imminently. France’s soft wheat harvest looks better than usual so we could even see some of their grain heading across the channel to dampen feed prices. All the talk of high straw prices might have turned off a few straw choppers helping to increase supply this winter.

The next four weeks will be critical to Scottish farming’s health this winter.