Improving the profitability & sustainability of Esperance port zone grain growers

China barley tour - 2018

As part of the R4R funded malting barley project “Barley Brand development for Asian consumers” a group of 11 growers and local researchers went to China in early 2018.  The group visited several processors and end users for WA barley as well as looked at the Chinese grain supply chain. Some key feedback topics from malting and brewing customers was the changing of barley varieties in WA and lower grain lower protein levels.

Our Chinese customers struggle to keep up with the changeover of new varieties.  Brewery customers prefer the same variety for consistency of flavour in their products.  As new varieties emerge they often have mixed messages on grower’s plantings coming via the trader.  The tour group provided a unique opportunity for maltsters and brewers to hear directly from farmers about intended plantings for the coming season and the reasons why certain varieties were chosen. 

During this discussion it was acknowledged that yield is the key driver for growers and the result being that new varieties will continue to be adopted.  From this conversation it was noted that we need to be more proactive in helping our customers understand what new varieties are coming.  In response to this, SEPWA sent several samples from the SEPWA trials program to assist this process.

By comparison the Canadian supply sources were often referenced as being of two main varieties which brewers liked.  Since returning from the trip we have learnt that Canadian farmers are rapidly adopting new varieties also. With the new varieties yielding 10 to 15 per cent above old ones this will place the Canadian supply in a similar situation as Australia.

Barley protein was a key point brought up by several maltsters and brewers.  Canadian malt 1 was generally quoted at around $20 USD over Australian malt 1 grade due to the extra protein.  It was not uncommon for malting factories to malt Canadian and Australian supply separately and then blend post malting to achieve the 10.5 per cent target.  One malt factory said that they have started to experiment with a price incentive for the trade to deliver higher protein cargoes from Australia.  

Food safety is a key focus in China.  Australian foods have a good reputation as coming from a clean and safe environment.  When we visited China’s largest malting company “Supertime” they took great pride in their state-of-the-art equipment for residue and food safety testing.  This equipment had been in place for two years and was now being used to provide food safety traceability down the line to their brewery customers.

In terms of a malting barley customer and a beer market, traditionally we have looked at China being a high adjunct (rice or other) brewing market.  While the main beers are still within this style, the beer market is changing, and 100 per cent malt beers could be found with little trouble.  While currently only a small market share, a small percentage in China can represent demand levels of the whole WA export barley crop.

The group visited several ports which imported feed and food grains – one with 60 hectares of storage bunkers and a turnover of more than 20 million tonnes of grain a year.  The sheer scale of these facilities highlighted the enormity of the Chinese market and dependency on imported grains.  This is especially so for the importation of feed grains for pigs and poultry.  Feed grains are purely price driven and Australian barely is often substituted into this market.  This is important to note as it sets the base line for the barely market overall and the relative premiums paid for malting and brewing grades.

SEPWA and the group would like to thank the WA trade office for helping arrange the trip and customer meeting.  Without their assistance the trip would not have been possible.
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