How could the drop in malt demand affect Scotland's agricultural sector?
Low malt demand and production cuts are putting financial pressure on Scottish farmers. The substantial drop in demand for malt, driven by distillers cutting production, is placing significant financial strain on the Scottish agricultural supply chain. Colin Johnston, Sales and Marketing Director of Crisp Malt, reported a drop of about 300,000 tons in demand for malt, leading to distillers needing to drain surplus stock from warehouses. This downturn is forcing Scottish farmers to face low returns, leading to reduced plantings, as they struggle to maintain viability given the stringent quality specifications required for malting barley.
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How it reaches Scotland
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The Agriculture and Horticulture Development Board reported that yields were 17 per cent below the five-year mean in parts of Europe, following a hot summer that affected the East Coast barley belt. Due to low returns, farmers have reduced plantings, and the price gap between malting and feed barley has shrunk significantly. Additionally, distillers have cut production because of bulging warehouses, leading to a drop in malt demand.
The full event1independent outlet -
Colin Johnston, Sales and Marketing Director of Crisp Malt, stated that whisky production is substantially down and there is a drop of about 300,000 tons in demand for malt. This reduction in demand for the key raw ingredient puts strain on the supply chain in Scotland.
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- cityam.com Monday
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country in north-west Europe, part of the United Kingdom
Everything about Scotland
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The facts so far
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- There is a drop of about 300,000 tons in demand for malt.cityam.com
- In Scotland, the area under barley fell by 13 per cent to 258,000 ha, the lowest since 1960.cityam.com
- The historic price gap between malting and feed barley has shrunk to just £5 -15 per tonne.cityam.com
- The industry is sitting on a lot of stock and it’s going to take quite some time to work through that.cityam.com
Why it matters
The Scottish agricultural sector relies heavily on high-value crops like malting barley to feed the global Scotch whisky industry. This industry is a major economic pillar, and the current downturn threatens the financial viability of farmers who must meet stringent quality specifications demanded by distillers.
This situation reflects broader pressures across the agricultural supply chain, where farmers are already dealing with high input costs and the loss of EU subsidies. The industry is currently trying to manage a surplus of stock while waiting for global demand for Scotch whisky to pick up again.
What we don't know yet
- Will the UK-India trade pact be sufficient to reverse the equation and push up barley prices?
- Will Scottish growers be willing to absorb the costs of changing growing patterns to meet new demands?
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- cityam.comMonday
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