The Canadian Wheat Board has made huge increases to its expected
initial payments for malting barley, trying to ensure it doesn’t get
cut out of barley supplies by hungry feedlots.
“Because the domestic feed market is so hot, it could actually draw in
malting quality barley,” said board spokesperson Louise Waldman.
“It could create quite a serious situation for the malting barley
industry, which is a value-added Canadian industry…. We had to send a
more up-to-date price signal and that’s why we took this somewhat
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unusual step.”
On July 31, the CWB announced the initial payments it had requested the
federal government to guarantee, but simultaneously announced it had
already asked that those prices be bumped up.
But it did not reveal how much of a raise it wanted.
The board is still not revealing what it wants to ask for wheat, durum
and feed barley.
But its request raises the value of an initial payment of Special
Select two-row designated barley to $190 per tonne from $147.
That is also well above the $164 per tonne initial payment for the same
grade in 2001-02. The designated barley payment increases range from
$41-$43 per tonne.
The $190 per tonne is even above the increased amount the CWB
originally asked the government to guarantee.
“This is a revision to that adjustment based on even further declines
in crop prospects,” said Waldman.
Both Canadian and American crops are declining, as is the Australian
wheat crop.
The European Union crop was looking huge, but its size estimate is
being cut because of damage from floods that have hit central Europe.
It is predicted the Canadian barley crop will fall to 7.8 million
tonnes, four million tonnes below the five year average and 24 percent
lower than the 2001-02 crop.
The small, droughted-out 2001-02 crop led to high prices for barley as
feedlots fought for supplies. That fight will continue this year.
Waldman said the newly requested initials for designated barley were
released, while those for wheat, durum and feed barley were not,
because malting barley sits in a unique situation in the prairie grain
economy.
It can find markets through both the board and the domestic feeding
industry.
