Weather risk expected to keep malt barley seeding low

Winnipeg, April 18 – Concerns about weather dictating the quality of malt barley is keeping producers from seeding the crop this year, one industry participant says, while weak prices offer no extra incentive.

“Acres are definitely going to be down, because of the fear of getting feed barley, which is horrendously low priced,” said Rod Green of Central Ag Marketing Ltd.

Statistics Canada is set to release its acreage estimates for principal field crops on Friday.

Trade estimates collected by CNS Canada ahead of that report range from 4.4 million to 6.4 million acres.

That compares with the 6.4 million acres seeded in 2016-17, according to Statistics Canada.  Those figures account for all types of barley grown.

Rain in Western Canada last fall caused an overabundance of feed grade grains, which means weak prices.

Prices for malt are low as well, further dissuading producers from growing it this year.

Canada’s crop is bigger than the country needs, while heavy production in competing growing regions cuts into export demand, Green said.

Australia’s 2016-17 crop was massive. It is exporting heavily to China, and the exports of all barley types could be double last year’s level.

That cuts into the amount China is buying from Canada.

“So consequently there’s a lot of malt barley on the farm,” Green said.

He added that the U.S. has had two big crops back-to-back, with prices below Canadian values. That further limits the demand for Canadian malting barley.

“It’s a combination of an abundance of supplies and lower world prices, and that’s pushing our domestic prices down,” Green said.

However, the craft brewing industry is providing a small, but strong spot in the Canadian malt barley market.

“That’s a steadily expanding market, that’s the positive news in the malt business,” Green said.

Spot prices for malting barley in Western Canada are between C$3.50 to $5.10 per bushel, new crop bids are between $4.80 and $5.10 a bushel, data from Prairie Ag Hotwire says.

 

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