The crystal ball into which many malting barley growers have peered when making marketing decisions lies smashed on the ground.
But marketing experts say the Canadian Wheat Board’s decision to drop its Pool Return Outlook for the 2007-08 malting barley crop shouldn’t change their farming plans.
“Don’t get too rattled,” said Charlie Pearson of Alberta Agriculture.
“We still (can grow) high quality malting barley. We still have a good list of customers out there that will pay a premium for malting barley.
“It’s still a good crop and I expect as most farmers do their budgets it’ll still be one of the better paying crops.”
Read Also
Poilievre promises EV action and calls for canola compensation
Conservative leader Pierre Poilievre promises EV action and calls for canola compensation
The wheat board yanked the malting barley PRO for 2007-08 on April 18 because of the government’s intention to eliminate the board’s marketing monopoly. The board said it could no longer reasonably predict future prices when it didn’t know how much malting barley it would receive from farmers in an open market.
It also cut the PRO for 2006-07 malting barley by about $8 per tonne, not because of weaker world prices but because of the policy uncertainty.
Wheat board director Bill Toews said the looming open market Aug. 1 means some producers may hold their barley back from the 2006-07 pool and cherry pick high cash prices.
“There’s quite a bit of unfinished business (left in the 2006-07 marketing year), with some fairly high prices,” said Toews.
“Farmers are going to be thinking ‘perhaps I’m going to be in an open market. Perhaps I don’t have to be in the pool. I can take the higher prices in the open market which exist now.’ That means those farmers who are in the pool won’t participate in those higher value markets.”
Pooled or not, 2007-08 barley looks rewarding and farmers shouldn’t pull acreage because of the uncertainty, said adviser Errol Anderson.
“The fact that the board is angling out of the malt business has no impact on the world price at all,” he said.
“Other contracts will pick up and reflect the world price.”
Anderson said farmers shouldn’t worry that prices will be lowered by the lack of the single desk.
“Overall, world prices are very strong and all projections are that they will stay strong,” he said.
“As a barley grower I would just go forward and plant barley as planned. The market will start coming back to the grower and reflect that world price, board or no board.”
Pearson said the possible absence of the wheat board from malting barley sales means that farmers need to ensure they have relationships with the buyers.
Rather than get hung up on whether the wheat board is offering a malting barley PRO, farmers should be making planting decisions based on their success with the crop.
“If I can get malt barley selected seven out of 10 years, I’m going pedal to the metal,” said Pearson.
“If I’ve only had malting barley five of the last 10 years, then maybe with the uncertainty that’s there, I may be a little more likely to go into a feed variety and get that 10 or 15 percent (yield) advantage.”
