I am writing to share a few thoughts on the difficulties involved in marketing malt barley. I am a grain farmer from Alberta, and I have been an active participant in the malt barley market for over a decade. During this time, I have learned and experienced many difficulties with the system farmers have resorted to using in marketing malt barley.
In my opinion, selling malt barley is in some ways similar to playing craps at a casino, except with a limited upside. The first hoop we have to jump through is to get a sample accepted, which usually requires 95 per cent germination. Obviously, no pre-harvest glyphosate can be used. When the sample is accepted the grain company informs the farmer, which may take one to four weeks. The CWB then sends you a letter stating your variety and tonnage has been accepted and when you should expect to deliver. The time of delivery is plus or minus six months and is for information purposes only. I have attempted to find out what information means. Apparently nothing, since the grain can be called in whenever.
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The farmer then waits until the powers that be phone to have the grain delivered. This could be at any time and is only determined by when the end user (maltster) has decided it needs the grain, leaving the farmer completely out of the loop.
Once the grain is delivered, the farmer waits at least two weeks to find out if his malt barley has been accepted by the maltster. If it is not accepted, the farmer is left with the decision to market his barley as feed, in a short time span or to haul his barley back to his farm. If the farmer chooses to market the barley, the price is dictated at that time and the farmer has lost his marketing ability and any opportunities.
There is one more hoop to jump through and that is the CWB pooled price. In the fall of 2010, the malt barley crop had rather poor germination due to frost. Consequently, the malt barley crop is 30 percent of normal production levels in Western Canada. According to the economic theory of supply and demand, one would expect a very high price for malt barley. Not quite. The CWB negotiated in mid-2010 a price which is approximately 15 percent better then feed barley. Again the farmer is left to take a price that hurts his bottom line.
The big question farmers have is whether to grow malt or feed barley. If the above scenario, which is totally at the convenience of the CWB and maltsters, doesn’t change soon farmers growing malt barley will become fewer. Perhaps playing craps might be a better option.
Peter Verchomin,Edmonton, Alta.
