Grain flows through a grid

Harvest 2023

A difficult year: Is there a shortage of malting barley for Oktoberfest beer?

It was not an easy season for agriculture. First too dry, then too wet. BayWa colleagues in the regions gave their all to fill the silos in this special year. What about the quantity and quality of the harvest this year? Jörg-Simon Immerz, Chief Trading Officer at BayWa AG, knows the answer to this question.

Mr Immerz, what challenges are farmers facing in the current harvest?

The harvest is always the result of an entire growing season. And the 2023 growing season was, let's say, "special". A wet spring delayed the spring sowing. This was followed by a long dry period in May and June, which caused drought stress for wheat, rapeseed and malting barley. Depending on the quality of the soil, yield losses were high in some cases.

Then, in the middle of the harvest, the other extreme ...

... persistent rain. Although this was able to cushion the drought-related harvest losses in some regions, it caused significant quality losses in malting barley and wheat elsewhere. This interplay of weather extremes caused a lot of uncertainty, stress and a tense harvest phase for farmers.

  • Combine harvester harvesting a grain field in the evening.
    It has been a challenging year for agriculture. In the harvest season, everyone once again has a lot to do.

How would you describe BayWa's role in this context?

In our core function, we are a marketing partner for farmers. Our claim is that the farmer can call and sell his goods at any time. This sometimes happens months in advance to secure the price. As a financially strong partner, we reliably take delivery of the goods and thus ensure the liquidity of the farmers.

But we are also advisors and are asked by farmers how we assess the current market.

Or how they should deal with difficult weather situations. Through long-standing business relationships, a real relationship of trust has developed here in many places. The basic prerequisite is always that the price is right and fits the market. On the other side are our customers from the processing industry.

Our main task here is to ensure security of supply twelve months a year.

In this way, we break up the harvest peaks and deliver goods when and in the quality the customer needs them. This year, for example, we have regionally very different qualities in the harvest – as a supra-regional trading partner, we compensate for these high fluctuations for our customers. This decoupling of timings and the balancing function with regard to qualities legitimises us in the market.

  • Portrait und quote by Immerz: "One of our main tasks is to ensure security of supply twelve month a year.
    Jörg-Simon Immerz, Chief Trading Officer of BayWa AG, was himself out in the field at the weekend on his own farm to harvest the last remaining yields.

Who is all involved in the harvesting process at BayWa?

First and foremost, of course, the entire teams at the sites: i.e. silo foremen, plant managers and commercial staff. The physical collection of goods at the sites is an absolute seasonal peak. Here, a huge amount of grain, oilseeds and pulses have to be collected, separated and made storable within a few days.

Our sales people also have a lot to do before, during and after the harvest phase. They conduct price negotiations with farmers and clarify whether the harvest is to be sold or whether the grain is to be stored at BayWa. The Erzeugnisse Agrar team lays the groundwork for the flow of goods well before the actual harvest.

Every day we deal with this issue 100%.

Because our trade must be thought through from start to end. We have to manage and price our business from the needs of our customers in the processing industry to the farmer. And this must then be implemented, because the quantities to be supplied are often traded many months in advance.

In order to have direct access to all markets and customers relevant to our field of work, the network with our colleagues at BayWa Agrarhandel GmbH in the north and grainli as a brewer's grain specialist also plays a decisive role.

The teams work across the board, so one cog has to fit into the other.

In addition, there is a complex scheduling and logistics process. The majority of the goods are delivered to our locations by the farmer, and parts are also purchased directly from the farms on site. Transport from the BayWa silos to the customer, as well as the relocation of goods within the BayWa network of locations, is carried out by the logistics teams.

This is a continuous, parallel process to the harvesting business, which is mastered by truck, rail and ship. What you often don't see at first glance is the subsequent important work that goes on in the back office. Only when all the invoices and credit notes have been prepared has the entire process been completed.

  • BayWa Silo in Schweinfurt
    At our locations, colleagues give their all to fill the silos.

From BayWa's point of view, is it already possible to draw up an initial harvest balance for this year?

In our field of work, rapeseed is likely to leave the field as the winner. It was convincing in terms of both quality and quantity. The winter barley was also satisfactory. The two critical crops, which have also been discussed a lot in recent days, are wheat and malting barley. In terms of quantity, we also had a good wheat harvest, which is comparable to the past three years.

What makes this year different, however, is the extreme qualitative spread.

This creates large price differences on the market. In the case of wheat, we are talking about market price differences in the three-digit euro range per tonne for the different quality grades in the extreme. Malting barley seems to have the biggest problems. In addition to a clear scattering of qualities, some very poor yields were harvested here.

For us as a trading company, the following applies: A harvest that fits in terms of quantity and spreads out in terms of quality is challenging. But, at the same time, it offers opportunities.

As long as we can manage our flow of goods professionally and serve our customers. That is our absolute focus at the moment. So there will be no shortages at the bakery or for Oktoberfest beer. The autumn harvest of maize and soya is still to come.