WINNIPEG — As old crop barley stocks dwindle across North America, producers can expect to see prices rally during the spring and early summer, according to an analyst.
Steve Bloss of Maple Leaf Foods says there were just 5.9 million acres of barley seeded in the Prairies last season, the lowest it’s been since 1964. He blames increased profitability of alternative grains and oilseeds for the setback and believes those forces will ultimately driver prices lower in the fall.
“They’re going to be pressured lower by corn values and by feed wheat,” he said.
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Fortunately, seeded acres in Canada are expected to rise, but Bloss says it’s difficult to imagine an increase to 2015-16 carry stocks.
“Barley values have been trading comparable to feed wheat. This trend is what we’re expecting for next year,” he said.
“(Canada’s) total barley exports to December 30 are 27 percent higher (than last year) at 740,000 (tonnes).
According to Bloss, Canada is on pace to export 1.83 million tonnes by the end of the current marketing year with the Middle East being the top buyer.
The European Union and Black Sea region continue to churn out feed alternatives too, said Bloss. The EU had 6.7 million tonnes of feed exports last year while eight million tonnes came out of the Black Sea region, he said, noting China exported 460,000 tonnes of barley on its own.
With all the challenges facing the industry, he expects demand rationing of domestic feed barley to continue through 2015-16.
Still, he says producers shouldn’t give up on barley if they are seeing good results in the field.
“There’s a good reason to grow barley in those areas where you can expect high yields,” he said, adding a high-quality crop is needed to rebuild malting industry stocks.
