BARLEY prices could come under pressure this year, with international beer consumption expected to take a hit in the vicinity of 800 million cases compared with last year.
Rabobank senior grain and oilseed analyst Cheryl Kalish Gordon said the outlook for 2020 was forecasting the world's beer drinkers would consume 82m litres less beer than 2019 - almost a 4.5 per cent drop, taking levels back to those of 10 years ago.
While at-home consumption has lifted, it has not made up for the drops experienced outside the home, most notably at large-scale events.
She said there was a tendency for most people to drink more when at large gatherings or special occasions, than when at home.
"The locations that will be most affected are those with a higher degree of on-premises drinking," she said.
"This includes craft brewers, which typically rely on consumption at the premises as part of the experience."
Dr Kalish Gordon said the postponement of live sporting events such as the Australian Football League, the National Rugby League and soccer events would have an effect, echoed globally, particularly with the postponement of the Tokyo Olympics.
While there are signs of lockdown restrictions easing, she said this would involve many steps before Australia would likely return to large-scale gatherings, and any celebrations would not make up for the deficit.
Other countries would likely take even longer to reach that stage.
Farmers will still be able to make good money for their barley this year, but they might have to revise their expectations.
- CHERYL KALISH GORDON
Dr Kalisch Gordon said this reduced beer consumption was coinciding with higher stocks of barley than wheat.
There has also been pressure put on feed barley, with the United States having excess corn, due to not needing as much for ethanol production or feedlots.
"A lot of feed available globally will put pressure on feed grade barley and in-turn put pressure on malt," she said.
But Dr Kalish Gordon said price-wise, local growers would be cushioned somewhat by the low Australian dollar, which is expected to be about 60 US cents.
"Farmers will still be able to make good money for their barley this year, but they might have to revise their expectations," she said.
Coopers Brewery malting manager Doug Stewart is not expecting the major brewer to reduce its demand for SA malt barley in the foreseeable future.
He said Coopers' Regency Park malting plant could produce up to 54,000t a year and was operating at full capacity, using locally-sourced grain.
About 15,000t of that is used internally at Coopers for its own brewing, malt extract and DIY beer concentrate operations, with the rest sold to customers in Australia and throughout Asia.
"While Coopers has experienced a reduction in its beer sales as a result of COVID-19 shutdowns, demand from other malt customers, particularly overseas, remains strong," Dr Stewart said. "Coopers has also seen increases in sales of DIY beer concentrates and malt extract."
