Good news for malting barley growers: What is selected this year looks like it will be worth more than barley selected last year.
Poor weather in Europe and the United States has pushed malting barley values higher this month, said Canadian Wheat Board analyst Don Bonner.
The midpoint of the CWB’s latest outlook for special select two-row barley is $181 a tonne at port, up $13 per tonne from last year.
Special select six-row barley is projected to be $22 per tonne higher than last year’s anticipated returns of $157 per tonne.
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September rains hurt harvest in the United Kingdom and northern Europe, and halved the exportable supply of malting barley, explained Bonner.
“They’ve really tightened up their own malting barley supply and demand balance.”
The European Union recently announced its subsidy levels for malt and barley. Both are significantly lower.
Last year, aggressive malt subsidies of $125 per tonne weighed on world markets. But this year – so far – the EU will subsidize malt exports to the much more tolerable tune of $50 per tonne. The barley subsidy has also dropped significantly from last year to about $44 per tonne, said analyst Peter Watts.
The lower subsidies “will definitely mean stronger malting barley prices this year,” said Watts, noting world supplies of feed and malt have tightened up around the world.
Meanwhile, the rains that kept southern Manitoba farmers off their fields in mid-September were much heavier south of the border, in the prime U.S. six-row malting barley growing region.
“Those rains took down the quality of their six-row crop, which was fairly small to begin with,” said Bonner.
He said it is harder to comment on Canadian malting barley quality. On one hand, harvest conditions have been better than might have been expected, given late spring seeding. But some malting barley has been stained by harvest rains. The wheat board is just now getting a handle on barley quality, he said.
Analysts will also watch the weather down under, where the Australian barley crop is coming out of semi-dormancy.
Weather from now until November will help determine the yield of the Aussie crop, while weather during harvest will affect the quality.
The Australian barley crop is also smaller this year, said Bonner.
The Australian Bureau of Agricultural and Resource Economics pegs barley production at 4.3 million tonnes this year, compared to 5.4 million tonnes last year.
The wheat board moved up estimates for feed barley prices by $7 to the $120 to $150 per tonne range.
The cut in European subsidies, along with strong world demand for feed barley, has helped increase values, said Bonner.
But the wheat board’s returns for feed barley depend on the amount farmers deliver into the pool. At current values, in some regions, feed barley for the export market is competitive with domestic values, Bonner said.
