WINNIPEG, Jan 29 (CNS) – The economics of barley growing seem to be on the upswing, says the president of the Western Barley Growers Association.
“Barley acres I don’t see dropping at all, in fact there could be some strengthening in acres,” said Doug Robertson of Carstairs, Alta., adding he believes canola acres are probably maxed out.
According to initial estimates from Agriculture Canada, released Jan. 25, barley area could hit 6.67 million acres in 2016-17, up from 6.53 million acres in 2015-16.
While prices are hanging mostly steady for malt at C$5.50-$6 a bushel, Robertson says the conditions under which farmers grow barley seem to be improving, as more malt companies are offering long-term contracts.
“A lot more of these malt companies are now looking at three-year agreements which is positive because you can take that to the bank,” he explained.
Robertson said the trend also benefits malt companies as they should get a more guaranteed supply.
“We’re starting to see a crop rate though the year so we’re starting to see them pay better prices for holding your crop over until later on in the year,” he said.
Using farmer bins means companies don’t have to build large storage hold product, said Robertson.
It also means deliveries can happen during the summer or whenever is needed.
Between weather and market conditions it’s impossible to say for certain whether growers will be successful in getting their barley accepted as malt variety.
But the improving economics make it more of a gamble worth taking, said Robertson.
“Seventy percent of the time you’re going to get selected while the other 30 percent you’re going to drop into feed market price. But even calculating that, the economics are better than a lot of wheat varieties you can grow.”
He expect Saskatchewan barley acres will start to recover, as malt companies rotate more growing opportunities for farmers.
“If you got the opportunity there people will use it,” he said.
