Feed barley has been feeling pressure recently because of higher export volume and increasing corn prices
WINNIPEG (CNS) — A tight supply of barley has pushed feed prices higher than prices for malt barley in Western Canada.
“(Feed barley prices) make some of these other prices look a bit ridiculous. There’s no demand from the domestic maltsters because they’ve all been plugged up ever since harvest,” said Rod Green with Central Ag Marketing in Airdrie, Alta.
Old-crop feed barley is trading at more than $5 per bushel while malt is about $4.25 per bu. Feed barley has been feeling pressure caused by higher export volume and rising corn prices, which are the result of the drought in Argentina.
Read Also
Ag in Motion speaker highlights need for biosecurity on cattle operations
Ag in Motion highlights need for biosecurity on cattle farms. Government of Saskatchewan provides checklist on what you can do to make your cattle operation more biosecure.
As of March 4, Canada exported 2.016 million tonnes of barley compared to 1.550 million tonnes last year, based on data from the Canadian Grain Commission.
Last year’s malt barley crop featured great quality across Western Canada, except for south of the Trans-Canada Highway where drought hit. Domestic demand was quickly filled and a drought in Australia led to increased demand from China.
Green said Chinese buyers prefer the Metcalfe barley variety with a bit higher protein level, leaving a lot of lower quality Metcalfe and Copeland barley sitting in bins on the Prairies.
“There’s a lot of farmers wrestling (over) whether to sell old-crop malt barley for feed or for malt,” Green said.
For the upcoming growing season, Green already has all of his contracts for malt barley filled until September, 2019. He deals primarily with domestic buyers.
“We’ve got a pretty steady demand (domestically). The beer consumption in North America is not rising, it’s falling slowly as we lose market share to wine and hard liquor, not in a big way but in a small way,” he said.
The rise in craft beers is helping offset the hit from falling beer consumption. Craft beer requires more barley because it is made from malted barley, yeast, water and hops. Big box beer however is made from ingredients like corn syrup and rice.
“The increase in the craft industry is slightly increasing the demand for malt barley. But you’ve got to realize that we’re still only at, I think the craft beer was about 10 percent of market share right now, so it’s not a huge factor,” Green said.
Green said farmers could look at changing the kinds of barley varieties they seed. Producers have tended to plant varieties more suited for malt in the past, but with feed barley prices higher, he thinks producers could shift to feed varieties.
“I think given the uncertain nature of the pea and lentil market and the current strength in feed barley, that certainly my outlook for acres are a lot more friendly to barley than they were, say, in January,” he said.
Agriculture Canada predicts a slight rise in barley acres. In its Outlook for Principal Field Crops released in February, Ag Canada predicted more than 6.1 million acres of barley to be seeded this year, compared to 5.8 million acres last year.
New crop malt barley prices are sitting around $4.75 to $5 per bushel delivered to elevator. Domestic demand should hold steady, said Green. However, international demand will depend on the weather in Australia.
