Most of the prairie malting barley crop is already sold, so growers here might not get much benefit this winter from eastern Australia’s harvest disaster.
But the situation could set up high prices going into 2011-12.
The Canadian Wheat Board said short supply globally of malting barley means two things: high prices in today’s world market and almost no supply cushion to fall back on if there are problems next growing season.
“Global malting barley supplies are going to be very, very tight. And they’re going to be tight going into next year,” said CWB market and weather analyst Bruce Burnett.
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The tight supply did not affect the 2010-11 December Pool Return Outlook, which actually dropped the malting barley forecast two cents per bushel to $5.49 for select two-row and $5.12 for select six-row.
The 2011-12 PRO will not be available until mid-winter.
The amount of Canadian crop that meets malting specifications is small and the wheat board has little malting barley left to price with a lot of it sold to domestic maltsters.
World malting barley prices are now surging because of torrential rain that hammered Australian crops at harvest.
On Dec. 14, the Australian Bureau of Agricultural and Resource Economics and Sciences forecast the country’s farm exports for 2010-11 would decline $1.2 billion from a September estimate of $30.2 billion, mostly due to the wet weather plaguing farmers in southeastern Australia and earlier drought that slashed production in the west.
The farmgate export value of wheat to Australian farmers will drop to $5.7 billion from the previous estimate of $6.7 billion.
The rain damage has led to the malting barley premium to feed barley jumping to double its regular spread, according to some analysts.
Australia’s overall grain crop will be larger than last year but there will be less malting barley and high quality wheat.
“Up until recently, many cropping regions in eastern Australia have had near ideal growing conditions and this has boosted crop yields to record levels,” said Paul Morris, the executive director of ABARES, in a Dec. 7 news release.
“However, untimely heavy rainfall around harvest time has significantly
lowered crop quality in Queensland and many parts of New South Wales. Quality issues reported include lower wheat protein levels, a higher proportion of feed barley and sprouted grain.”
Burnett said the full extent of the damage to the Australian crop, and its impact on supply and demand projections, won’t be known for months.
“Our situation here in Western Canada isn’t even known yet, totally, and we finished our harvest (quite) a while ago,” said Burnett.
Early harvested eastern Australian crops came off in excellent condition. Western crops were harvested in good weather but after suffering shrivelling and other damage in the growing season. And the wet harvest of the remaining portion of the eastern crop contains downgraded crop.
Australian farmers have a mixed bag of crop quality in their bins, and sorting it out will take time.
