Russia has now nearly finished their 2017 harvest with 87.9m tonnes of wheat compared to 75.8m tonnes in 2016 which is an increase of 16%. With a record wheat crop, Russian wheat exports are significantly ahead of last season. By October 12, Russia had exported 12.3m tonnes, up 21% on the previous year. This will see Russia becoming the world’s largest wheat exporter.

EU exports in comparison have the opposite situation reaching only 6.6m tonnes to date compared to 8.8m tonnes at the same time last year.

The UK 2017 barley harvest has produced a bigger tonnage than last year resulting in a higher surplus of 1.8m tonnes available for stock feed or export. This is below the levels seen in 2015-16 when barley exports reached nearly 2m tonnes but it still represents a year-on-year increase and an opportunity for a stronger export campaign.

So far this season the UK has exported over 250,000 tonnes of barley and the UK has been capitalising on opportunities that arise around the globe, especially in Spain, where production is more than 2million tonnes below the five-year average. Increased Spanish import demand is as a result of drought in the country during the important crop growing period.

In 2015-16 Spanish production was down more than 1million tonnes on the five-year average and the need for Spain to import barley increased and imported 1.2m tonnes. In 2015-16 UK barley exports accounted for 38% of Spain’s barley imports which is 450,000 tonnes and over the past five years the UK has accounted for 29% of the nation’s import on average.

The Spanish import requirement this year is estimated at 1.1m tonnes and if the UK exports account for 29%, based on the previous five years, this would see a total of around 320,000 tonnes of UK barley heading to Spain where 141,000 tonnes have already been exported to there so far this season.

Opportunities are there for UK barley exports outside of the EU, Algeria could see an increased demand for imports as barley production is down 27% on their five-year average at nearly 1.0m tonnes.

Further opportunity could come from Saudi Arabia, despite forecasts of lower barley import demand this season and normally the UK does not supply in large tonnages to Saudi Arabia but other exporting countries that do are having production problems of their own.

Apart from the UK there are a number of barley exporting countries in the global barley market place and in the EU, apart from the UK, France and Germany are key barley exporting nations. In France production was 8% up on the average, at more than 12m tonnes. German production is up only 0.2% on the five -year average at just under 11m tonnes and production increases for both countries could see them provide strong competition against UK barley for export markets.

The Black Sea area with Russia and Ukraine have historically had variable barley yields and production but are now seeing improved consistency in yield levels and this year the Russian barley harvest could be the largest in the past 20 years, making Russia a strong competitor for barley exports.

In the Southern Hemisphere, the Australian and Argentinian barley harvest is still to be done and with the drought conditions in Australia and excess rainfall in Argentina this could see their harvest production down quite considerably. Forecasters are putting Australian production down 16% on their five-year average and Argentina down 34% on the same period.

As always price will play its part on the world market and the increased availability of the UK crop for the global market relative to last year, combined with the present weakness in Sterling, has helped make the UK barley amongst the cheapest for export. Last month UK barley was almost $12 below French barely prices and $15 below the Russian barley price.

One area that is yet unknown is how Brexit will affect UK export prices and competitiveness with a possible €16 tariff further reducing margins and subsequently the incentive to grow barley in the UK.

UK barley usage in compound and poultry feed in September 2017 increased by 29.4% year-on-year, wheat and whole flaked maize usage for the same month was up 3.3% and 16.1% respectively compared with September 2016. From July to September 2017 barley usage in both compound and poultry feed increased by 41% on last year for the same period.

Higher demand for barley in animal feed this season is as a result of the relatively larger price discount of feed barley to feed wheat. In July 2017, the discount or ex-farm UK feed barley for feed wheat reached £30 per tonne, the highest in three years. This price difference has since fallen to £16.70 at the end of October but still remains attractive to buyers and could see a further rise in barley demand.