New Zeeland: Barley prices set to soar

Barley prices are set to soar next season, which is bad news for brewers, poultry and pig farmers - the biggest users of the grain in New Zealand, ONE News reported August 9. But growers of the increasingly sought after commodity are rubbing their hands together.

With prices already climbing, ONE News headed for Horarata to talk with some of those affected. "We will be feeling very happy and like all grain farmers we will probably reinvest in nice new shiny toys," says Andrew Gillanders from the Federated Farmers Grains Council.

The heightened demand could propel the price from $270 a tonne to around $400 a tonne this harvest. "Most farmers have seen this coming for a long time" says Gillanders. And it is dairy farmers who are getting some of the credit for the turnaround.

Silage, the bovine fast food, is supplemented with barley on Harry Schat's farm for the the main aim of producing more milk.

The increased cost of the grain is something Schat is happy to wear. He says because dairy farmers are to receive a higher payout, cropping farmers are not going to give it to them for nothing. And it is not just the New Zealand dairy farmer pushing up the cost.

Overseas the bio-fuel industry has increased cereal prices, on top of that extreme weather conditions from droughts to floods have slashed barley production.

The resulting shortage has pushed overseas prices up by 25%. The brewing industry here is already feeling the effects. In their half yearly announcement Lion Nathan forecast a commodities increase of almost 5% mainly due to barley and aluminium prices.

But will it effect the price of your pint? "In a recent price increase we only added on probably under 1% of what we are being hit with over the last year," says Peter Kean from Lion Nathan.

"When you're sitting down at the pub on Friday night with a jug of beer and a bacon and egg pie, think of me because I'll be smiling all the way to the bank," says Gillanders. Now it is just fingers crossed for a good harvest this season, so growers can reap more of their much awaited reward.