Cereal market could raise a glass to whisky distillers

Lower malting barley stocks, a likely cyclical upturn in whisky production and a greater commitment from grain whisky distillers to using wheat rather than maize point to a reasonably optimistic forecast for Scottish grain growers in 2018.

And, despite the undoubted threats of Brexit on the grain trade, a leading economist has claimed that, by working with cereal buyers in this country, Scottish growers might minimise their short to medium term exposure to threats in the grain commodity markets.

Speaking at this week’s Agronomy 2018 conference, organised jointly by SRUC and the AHDB, the head of the college’s rural business unit, Julian Bell, said that only UK buyers could guarantee frictionless market access in the future – but at the same time only UK farmers could promise a frictionless supply to these buyers.

This, he claimed offered the opportunity for both sides to benefit from longterm supply arrangements.

He also said that it was becoming increasingly difficult for the whisky trade to meet its requirements for non non-glycosidic nitrile producing varieties which were low in nitrogen outside Scotland, with producers in other countries tending to target the brewing market.

Bell said that while the change to using wheat rather than maize in the production of grain whisky had helped restore Scotland’s traditional premium for soft wheats, he hoped this would be a lasting improvement.

Stating that only one distillery continued to use maize he explained that whisky producers insisted on using non-genetically modified maize – and the widespread use of GM varieties in the US meant that supplies had to be sourced from France or other EU countries to ensure that they were GM free – but this market could be threatened by Brexit.

“And while all wheat is non-gm, only Scotland grows the right soft wheat varieties to meet the needs of the distilleries,” said Bell, who added this meant that securing local supplies made sound business sense.

On the wider front Bell also indicated that, after 2017 had marked the first drop in global grain stocks since 2012, 2018 was likely to see a further reduction.

He said that growing demand meant that it would require a record world harvest to hold stocks steady – while an average harvest would see stocks falling by 83 million tonnes.

However with this year’s La Nina climate pattern already looking set to hinder production, he said that stocks could fall by as much as 158 million tonnes – and lower stocks tended to mean higher prices for growers.