Table of Contents

1. Overview

Malting barley is a particular type of barley used in making beer, flavourings, and extracts. Only a portion of the malting barley planted each year has the specific qualities needed to be selected for malt. To produce malt, barley kernels are soaked, germinated, and dried. Although the kernels look the same on the outside, this process causes chemical changes inside. The malted barley can now be used to make malt extract, beer and flour.

Like regular barley, hulless barley does have a hull, but it is only weakly attached to the kernel and therefore easily removed during harvesting. The hull is the inedible outer coating of the kernel that protects the seed like a jacket. Hulless barley is convenient and is becoming increasingly popular both for human nutrition and as feed for livestock.

Barley grain may be milled to produce barley flour, flakes, and bran. Milling involves crushing the seed kernel and separating the outside (bran) from the endosperm, which is the inside part of the kernel where food is stored to nourish a new plant. The endosperm is then ground to make flour. To improve its digestibility, barley grain is cracked or rolled for cattle feed and ground to make feed for pigs and chickens.

Barley straw is the dried stems of the barley plant after the head that holds the grain kernels has been removed. Straw is often used as a soft, dry bed for livestock. It can also be made into building materials, paper and fibre board. To make silage, the entire plant is cut down, piled, compacted, and then allowed to ferment. Fermentation preserves this highly nutritious feed for beef and dairy cattle.

Source: Barley Market Value Chain Profile. Find it on the Directorate Marketing web pages at www.daff.gov.za. 

 

2. International business environment

  • The top ten barley producers are the EU (Germany, France, Spain and for now, the UK), the Russia Federation, Canada, Ukraine, Australia and Turkey. Top barley producers in Africa are Algeria, Morocco, Tunisia followed by South Africa and Egypt.
  • Barley is included in the “Grain: World Markets and Trade” circular available from the United States Department of Agriculture (USDA). Statistics of global role players (countries) are listed. Production, consumption, exports etc are looked at. This circular is available on the Foreign Agricultural Service Home Page. The address is www.fas.usda.gov.
  • Export/import figures can be found on www.sagis.org.za. The Monthly Bulletin contains updated information.

 

3. Local business environment

Barley, a winter cereal crop, is mainly produced in the South Western Cape under dry land conditions. Two-thirds of our barley is produced in the areas around Caledon, Riviersonderend, Bredasdorp, Napier, Swellendam and Heidelberg. The remainder of the production is in the Northern Cape under irrigation (Vaalharts, Douglas, Barkley West and Rietrivier/Modderrivier). Barley is also grown by some small-scale farmers at Taung in the North West Province.

Barley is different from most, if not all, other agricultural commodities, as there is only one major barley buyer in South Africa, namely ABInBev, previously the South African Breweries Maltings (Pty) Ltd (SABM).

Being able to buy barley locally supports the local economy, is more efficient (less travel and packaging), ensures quicker delivery and secures a good quality of the end product. The size of the annual barley crop is one determining factor with regards to how much locally grown barley is used. Another factor is to what extent certain varieties, required for malting and brewing, can be produced under South African conditions.

Normally between 70 and 90% of barley produced in the south Western Cape is suited for malting purposes. This figure is directly dependant on the climatic conditions during the growing season. A record crop might be followed by several seasons of bad climatic conditions. It was to stabilise the fluctuations caused by total production in one geographical area that the crop is grown under irrigation in areas other than the south Western Cape.

Barley producers have a guaranteed market for a specified tonnage of malting quality barley per year, and a formula price linked to the Safex wheat price for his total crop.

The barley area in the Western Cape expanded rapidly over the past three years, reaching 84 thousand hectares in 2016, with some expectations that this will increase to approximately 90 thousand hectares in 2017 (BFAP, 2017). Following the initial step change caused by the Alrode expansion, demand for malting barley is expected to grow at just under 2% per annum over the projection period. This implies a lesser reliance on imported barley relative to the past decade, with imports stabilising below 50 thousand tons per annum (BFAP, 2017).

The barley marketing season in South Africa commences on 1 October and ends on 30 September the following year. A statutory levy in terms of the marketing of Agricultural Products Act is applicable (R5.00/t barley). The levy is lower than in previous years as it no longer finances seed breeding research. 

The BFAP Baseline Agricultural Outlook 2017 includes a look at the historic gross margin performance between winter crops in the Overberg region,and provides additional information related to crop competition in the Western Cape, by considering gross margins for wheat, barley and canola under different yield scenarios. Find the document at www.bfap.co.za.

Statistics (e.g. crop estimates, export/import etc) may be found on the Department of Agriculture, Forestry and Fisheries’ website – take the “Branches” and "Administration" options at www.daff.gov.za - and on the South African Grain Information Service (SAGIS) website – www.sagis.org.za.