Craft brewing giving malt barley prices a hop

By Jade Markus, Commodity News Service Canada
Winnipeg, March 3 (CNS Canada) – The craft brewing industry is providing the fastest rising demand for malt barley, according to one analyst.
This is helping malting barley prices, but overall reduced demand for beer and an expectation for increased barley acres could keep a lid on values.
“Many maltsters are either 100 percent craft or moving the percentages up all the time to sell to the craft industry,” said Rod Green, manager at Central Ag Marketing Ltd.
“So consequently that’s going to increase demand for malt, and as demand for malt increases that will strengthen the price.”

As of 2014, craft beer production had been rising at a rate of 18 percent per year in the U.S., according to a report from the Brewers Association.
New breweries are opening every day in North America, Green noted.
“But saying that, the beer consumption in North America is very flat,” Green said.
Beer has been losing market share to wine and liquor. In 2004-05 beer controlled 49 per cent of the market in Canada. As of 2014 that was down to 42 percent, Statistics Canada figures show.
Delivered elevator malt barley prices run between $4.90 to $5.75 per bushel in Manitoba, the only province with that data readily available, according to Prairie Ag Hotwire.
But for the most part, the old crop malt barley marketing campaign is complete, Green said.
“Export, domestic, everything is pretty well covered and wrapped for the year,” he said.
New crop malt barley prices range from $5.05 to $5.25 in Manitoba and Saskatchewan, Prairie Ag Hotwire data shows.
Agriculture Canada forecasts barley seeded area, including malt and feed, at 6.67 million acres in 2016, up from 6.53 million last year.
Green expects malt acres to increase by about five percent.
“It’s grown principally on contract, particularly with domestic maltsters so it’s slightly higher again this year.”

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