The hot, dry weather has destroyed crops on the Continent

Europe is facing a serious shortage of malting barley as the heatwave continues, leading to concerns over more cost pressures for brewers.

The hot, dry weather has destroyed crops on the Continent, pushing prices for European malting barley up by some two thirds to a five-year high of €230 per tonne since mid-May, according to a report in the Financial Times.

Latest forecasts from Mintec suggest the German winter barley crop will fall 18% year on year, while French and Polish production is also set to drop.

UK brewers should be less affected by the shortages than their counterparts in Europe and the US because they source most of their malting barley domestically, according to Brigid Simmonds, CEO of the British Beer & Pub Association.

“The UK is a net exporter of malting barley and in that sense we enjoy a degree of self-sufficiency,” she adds.

The European shortages could even present an export opportunity for UK growers, says Sean Burns, field trials senior manager at AHDB Cereals & Oilseeds. “Most of the UK’s malting barley is grown on contract to a maltster, which is at a fixed price. However, I assume any increased demand in Europe, laws of supply and demand being what they are, would lead to an uplift in price for any surplus in this country that could be disposed of.”

Having said this, it is too early to assess how the recent hot weather will affect malting barley harvests in the UK, Simmonds says. “Weather conditions, whether good or bad, can have a positive and negative impact on yields, which can influence pricing.”

AB InBev, which sources some 75% of all barley for UK-brewed Budweiser from British farms, says it is “always monitoring crop yields and forecasts and has put factors in place to mitigate any risk of shortage”.