Canadian barley acres may finally have bottomed out, according to officials in the grain and livestock industries.
“We do not have enough barley around to sustain our local industries right now,” said Bruce Burnett, the Canadian Wheat Board’s director of weather and market analysis.
He expects feed barley prices to rise to encourage more acres in the ground in 2012.
“We’re going to need to find some more feed grains somehow and the one way to do that is for prices to go up,” said Burnett.
“We’ll see probably a stronger barley market at the end of the year.”
Bill Jameson, chair of the National Cattle Feeders Association, also anticipates a reversal in what has been a precipitous decline in barley plantings.
A crop that used to consistently occupy 11 to 13 million acres of prairie farmland in the 1990s and early 2000s has plummeted below seven million acres in each of the last two crop years.
Jameson thinks the Canadian Wheat Board is partly to blame for the crop’s steady demise. He contends that young farmers with big operations don’t like dealing with the CWB and have switched to growing pulses and special crops.
Cattle feeders believe the crop’s fortunes will change come Aug. 1, 2012, when the board loses its single desk powers and the crop starts to attract research dollars from some of the major players in the seed development industry.
“The general consensus is that it should help to possibly increase barley acreage,” said Jameson.
He expects prices will rise once growers are allowed to freely export feed barley to the United States, which would be a double-edged sword for cattle producers.
“On one hand we expect barley to increase in price, which is probably a bit of a detriment to the cattle industry. However, we also feel the acreage will increase,” said Jameson.
Burnett doesn’t see a direct link between Canada’s single desk marketing system and barley’s flagging popularity.
“You can blame the wheat board or you can blame whatever. I would tend to think this is probably highly related to the price of oilseeds and other competitive crops,” he said.
Barley is grown in the same regions of the Prairies as canola and is having a tough time competing with $12 or $13 a bushel prices for the oilseed.
Competitive pressures are also slashing U.S. barley acres, which are less than one-third what they were two decades ago, tumbling to 2.6 million acres in 2011 from 8.2 million acres in 1990.
The decline has been particularly stark in North Dakota, where the crop has lost ground to soybeans and corn.
“They didn’t have a Canadian Wheat Board in the upper Plains and their barley acreage is shrinking as well,” said Burnett.
Any resurgence in the crop will likely happen in Canada, where it is still the main source of feed for the cattle industry. Barley in the U.S. has a tough time competing with a corn industry bolstered by an ethanol sector that is consuming 40 percent of the corn crop.
Burnett doesn’t expect a massive rebound because barley still has to compete with oilseed markets, which are expected to remain strong for at least another two or three years.
But there is a sense that change is finally in the air for a crop that has been in a free fall for decades.
“The decline probably has gone on long enough,” he said.
Jameson said the only thing that could get in the way of a post-CWB monopoly barley comeback are some of the new low heat unit corn varieties starting to make inroads in Western Canada.