RMI Analytics Crop Tour Report – 2016 Australia
From October 24 to 26 RMI Analytics conducted a malting barley crop tour in South Australia, taking in the growing regions of the Clare and Barossa Valley’s in the Mid-North region. The tour visited breweries, commercial fields, trial plots, grain receival areas and malthouses. During the tour the peak of the barley harvest was still about four weeks away with excellent looking crops of barley and wheat seen in fields across the region. More warm weather is now needed to help crops finish off before harvest can start, with expectations combines won’t start rolling until the end of November. Expectations are firming of an Australian barley crop of over 10m MT with yields in the regions visited expected to push 5-6MT/Ha, well above the average of 3-4MT/Ha.
The selection rate for malt is still unclear as protein is expected to be low thanks to consistent and at times excessive rainfall during the season. But with such a large crop expectations are there will be ample supplies of malting barley.
During the tour local industry experts and farmers told participants around excess rainfall over the season, and especially heavy rain thanks to a cyclone about a month ago, has seen almost every region experience above average rainfall.
The Coopers Brewery is Australia’s largest independent brewery owned and operated by the Coopers Family which founded the brewery in 1862 in Adelaide. Positioned in the market as a major craft/small macro brewery the company has been able to ride the wave of interest in craft beer due to its history of all malt artisanal beers while also benefitting from efficiencies of scale in production, distribution and raw materials. But it’s wasn’t so long ago, in the 1970s, that the brewery almost went bankrupt only to be saved by the legalization of homebrewing in 1972 and their foray into supplying canned brewing kits made up of hop and malt extract. Today 40% of the company’s production is malt extract for the home brewing market with Coopers the world leader in supplying tinned malt extract to home brewers. Over the last decade the brewery has seen double digit growth every year in beer production with their Pale Ale (4.5% abv) the biggest success story followed by Cooper Mid Ale, a 3.5% lower alcohol beer available at sporting events where full strength beer is prohibited. At the 850,000HL Regency Park brewery in Adelaide they also brew Brooklyn Lager, Sapporo and Carlsburg products under license agreements.
Currently Coopers is building a malthouse at the site of their brewery with the plan to produce 55,000MT of malt per annum and sell 37,000MT of total production. Demand from Coopers will use about half of this (17-18,000MT).
The completion date for the malthouse is November-December 2017.
En-route to the next scheduled stop at a series of trial sites in Roseworthy, about an hour and a half North from Adelaide, the tour drove through the town of Pinery which was hit by a series of fires last November which saw two people die and 82,600Ha of land burnt out. Today, the land shows little sign of the fire last year with fields looking green and healthy and only a few trees showing burn marks. At the Roseworthy Farm the tour heard the site had hit its annual rainfall average two months ago, with the total land cropped running at 1400Ha out of 4000Ha total. As the farm is a privately run operation of the University of Adelaide the majority of this land is campus buildings. The average yield for barley here is 3.4MT/Ha with Commander grown last year yielding 4MT/Ha while also achieving malting grade. Expectations are for excellent yields in the Compass barley, the University of Adelaide’s latest variety.
From here the group visited trial sites in Turretfield where the harvest was expected to be very late with the expectation it’ll begin in late November and continue through into January.
On the second day of the tour participant’s started off with a visit to Tarlee and the farm of Trevor Day. Mr Day said he struggles to achieve malting grade and subsequently he’ll grow less barley next season as without the premium for malting quality he struggles to meet the cost of production. The total cropped area of the farm is 1050Ha with a few thousand sheep also run on the property for wool and meat. Barley was sown on May 17 and the harvest is expected to start in the most advanced regions at the end of October, on the highest part of the farm, with the bulk expected to get underway in mid-November.
Next the group visited the Hart Field Day site which is a trial site that runs field days once a year in September. The site aims to independently trial barley varieties and farming methods with the income drawn from commercially farming 3/4 of the land as a not-for-profit corporation. This year the area has seen 350mm during the growing season with over 400mm of rain falling during the year, exceeding the annual average rainfall. At the moment the soil still has 30-40% of its moisture whereas last year the soil was completely depleted. The tour heard in the region about 90% of farmers are growing Compass in place of Commander due to the increase yields but there is no local Compass segregation so it can’t go as malting barley for export. Large grain compilers participating in the tour said 2016 was a transitional year and work is being done on rolling out more Compass segregations. Regarding a premium for Compass of malting grade the export market is expected to find a premium but as yet it’s hard to predict what that will be. Domestically until Compass can be malting accredited (earliest 2018) it can’t attract a malting premium.
The final area to be visited on day two of the tour was at Crystal Brook where fields of Spartacus, Scope and Compass were seen side by side. At the property 2000 acres of barley are farmed with expectations 2016 will be a 1 in 10 or a 1 in 20 year for barley production, with yields of up to 5-6MT/Ha (3-3.5MT/Ha avg). Scope is grown on the farm as part of the weed control program (blackgrass is a problem) but it’s expected to be replaced by Latrobe in coming years. In the local area the tour heard there are ample segregations for malt and feed barley, of course variety specific as well. This year expectations are for lower protein which might make achieving malting grades pretty difficult but farmers are confident they’ll get close, perhaps achieving FAQ status.
The final day of the tour took in receival sites of Viterra and the export terminal at the Outer Harbor in the Port of Adelaide as well as Cargill’s Joe White Malting’s nearby.
First stop was the Bowman’s receival site 125km North of Adelaide which has six bunkers and two large sheds which make up 300,000MT of storage. Segregations exist here for seven to eight different grains and varieties but at the time of visiting no shipments of 2016 crop had been received. Next up was the Outer Harbor where the tour group saw the 65,000MT of storage capacity and heard the facility had exported 1.2m MT of grain so far in 2016.Finally the Joe White Maltings hosted the tour where participants saw the two different malting processes, drum and GK plant, as well as the bagging line (the only one Joe White uses) and the container and truck output areas. Joe White has 80,000MT of capacity at the facility with malt export and sold domestically in 50kg bags as well as trucked and in containers. Joe White’s other facility in Adelaide at Cavan is currently mothballed but it possesses a further 96,000MT of capacity.
This is the fifth RMI Analytics crop tour of 2016 and we would like to offer our sincere thanks to sponsors The University of Adelaide, Glencore-Viterra, Cargill and Coopers.
Thanks as well go to local farmers and research organizations who opened their doors, and their fields, to the tour group and shared their passion for the malting barley.
Finally, it’s important to thank the participants, who make this unique malting barley industry networking opportunity such a success.
The RMI Analytics crop tour program for 2017 will be announced in February.
Manager of Market Insights & Reporting
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