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 producer of barley is the EU, followed by Russia, Ukraine, Australia and Canada. The top exporter of barley is Australia, the EU, Russia, Ukraine and Argentina. The biggest importers are China, Saudi Arabia, and Japan (USDA, 2018).

Further reading:

  • The Bureau for Food and Agricultural Policy (BFAP) Baseline 2018-2027 includes an overview of the global barley situation and trends (see page 39).
  • 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.

South Africa: import and export

  • Under the new EPA (see “Export” chapter), 10 thousand tonnes can be imported duty free from the EU.
  • 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. Recently, production started extending into the Swartland region (BFAP, 2018). 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.

Normally between 70 and 90% of barley produced in the south Western Cape is suited for malting purposes. This figure is directly dependent 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.

The area planted to barley in the Western Cape has increased from just over 70 thousand hectares in 2014, to 85 thousand hectares in 2017. With irrigated barley also facing continued competition from longer-term crops, beer companies buying domestically produced barley are increasingly looking toward the Western Cape for supply requirements.

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). Barley producers have a guaranteed market for a specified tonnage of malting quality barley per year, and a pricing mechanism linked to the wheat futures (see the note about Grain SA’s complaint to the Competition Commission under heading 5).

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.

With expanded malting facilities south of Johannesburg operational, the demand for barley increased significantly in 2017, as domestically produced malt replaced previously imported volumes.

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 (R30.00/t barley).

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 (DAFF) South African Grain Information Service (SAGIS) websites – www.daff.gov.za and www.sagis.org.za respectively.