EDDIE GILLANDERS: New Moray maltings could be a big boost for local barley producers
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THE front page story in last week’s Northern Scot that Simpsons Malt Ltd have been granted planning permission by Moray Council to build a £65 million state-of-the-art maltings and malting barley storage at Rothes is welcome news for Moray and north-east farmers.
It’s more than three years since the Berwick-based family-owned business bought the 40 acres of land at Greens of Rothes, where the new plant is to be built, followed by the acquisition of the grain merchanting business of WN Lindsay Ltd, giving them ownership of four grain stores in Scotland, including Keith and Stracathro.
The development, which will create 40 new jobs, attracted the usual not-in-my-back-yard (NIMBY) objections but planning permission in principle was granted, although only by a majority vote, at a meeting of the council’s planning and regulatory services committee.
It’s anticipated that the building of the new maltings will be completed over the next two years and will provide a market for up to 60,000 tonnes of barley which will be sourced from local farmers through the company’s merchanting division, McCreath Simpson and Prentice, and transported to Rothes from the grain stores at Keith and Stracathro.
The annual production capacity of the new maltings will be 85,000 tonnes and most will be earmarked for Speyside distilleries.
Simpsons are a major supplier to these distilleries but don’t have local maltings at present although they operate state-of-the-art maltings at Berwick and Tivetshall St Margaret in Norfolk.
It makes sense for the company to have a malting facility in the north-east close to their main customer base on Speyside.
“Operating a maltings in the heart of Scotch whisky country will enable us to operate more efficiently and sustainability while also assisting our end user customers in the area with their own sustainability objectives,” said managing director, Tim McCreath.
“If we don’t build this new facility, the malt will have to come from elsewhere, which could be England or Europe.”
The company has a goal to reach net zero by 2030 and has already achieved Certified B Corporation status which is an international measure of efficiency and sustainability.
The new maltings will provide an important new market for local barley growers looking for security and a guaranteed market for their crops.
Contract will be all-important as depending solely on the spot market is a dangerous game.
Some years, if supplies are short, it can work but more often maltsters have secured their requirements on contract and have little interest in buying on the spot market.
Following two years of good harvests, most maltsters will have carry-over stocks this year and have already tied up most of their contracts for this year’s crops.
The advice to farmers is to contract now as there will be little, if any, demand on the spot market at harvest time.
Maltsters are, of course, notorious for trying to talk the market down and there are plenty of “experts” out there suggesting that the market will remain strong.
The futures market for wheat has certainly recovered in the light of further uncertainties about grain exports from Ukraine and most malting barley contracts are linked to the wheat futures price.
Speaking at the recent AHDB cereals roadshow, SRUC economist, Julian Bell, stressed the importance of global trends.
“I’m just back from Argentina where there has been six months of drought,” he said.
“Despite high prices, the world is not going to be producing a big crop in 2023.
“World grain stocks had been reducing for 10 years when Russia invaded Ukraine a year ago.”
Ukraine lost 30 million tonnes of production last year as a result of the war and will lose even more this year.
“The resulting high grain prices would normally lead to a spurt in global output but high fertiliser and fuel prices are restricting growth.”
Maize underpins the world cereals market but requires large rates of fertiliser.
This could mean a reduction in output which could effectively increase the demand for wheat for distilling.
“Distilling wheat demand is already strong and will remain so as long as it’s cheaper than maize,” said Mr Bell.
“It looks as if distillers will require a million tonnes of wheat this year which is about the same as projected Scottish production.
“This would indicate a possible premium for Scottish wheat.”
An increase in the autumn sowing of crops will inevitably mean a reduction in spring sowing and Mr Bell calculates that the supplies of malting barley this year could drop by as much as 40,000 tonnes if yields meet the five-year average.
“With new distilleries coming on stream supplies will be tight if high yields and good quality are not achieved,” he said.
“It might need 95 per cent of the barley grown for malting to meet the spec which is a big ask.”
As ever, much will depend on the weather between now and harvest.
And the spring crops aren’t in the ground yet.
