CANMORE, Alta. Ñ The Canadian Wheat Board must send clearer signals to farmers that the brewing industry needs high quality malt barley, say members of the brewing and malting industry.
The way barley is priced in the wheat board’s pooling system, there is no incentive for farmers to sell their barley to maltsters, Malting Industry of Canada president Phil de Kemp told a joint convention of the Western Barley Growers Association and the Western Canadian Wheat Growers Association.
“There is no market response where we can send signals to the farmer to attract barley for our industry.”
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It was a concern echoed by Luke Harford, director of economics with the Canadian Brewers Association.
The poor crop of 2002 and its shortage of malting barley shocked the brewing industry into taking a more active role in securing supplies. Only 800,000 tonnes of barley were eligible for malting quality that year, a third of what was available a year earlier.
“We understand your need for a price signal that motivates you to put malting barley in the ground in the spring,” he said.
“We need you to get that price because we need that barley.”
De Kemp said the malting industry has changed dramatically in the last 10 years. Before 1995, when there were many small elevators across the Prairies, maltsters could skim the highest quality barley from the crop and keep it segregated.
Now, with fewer elevators and less segregation of quality, plus the growing demand for barley from the hog and cattle industry and around the world, maltsters are no longer able to buy consistent, high quality malting barley, said de Kemp, whose organization represents the four main Canadian malting companies.
“The malting industry right now receives average quality at best.”
Since 2001, western Canadian malting barley production has increased from 9.7 million tonnes to 12.56 million tonnes in 2004. In 2001, 2.2 million tonnes were selected for malt. In 2004 only 1.8 million tonnes met malting quality standards because of the early frost and difficult harvest conditions, said Bob Cuthbert, senior marketing manager with the wheat board.
During that time, demand for Canadian malt has increased, especially in China, which has leaped ahead of the United States to become Canada’s biggest export market.
In the 2003-04 crop year, Canada exported 460 million tonnes of malting barley to China, up from 43 million tonnes a year earlier.
Those increased sales have put Canadian maltsters in direct competition for the farmers’ malt, de Kemp said. His organization wants a way to send signals to farmers to sell their high quality grain to maltsters rather than ship it for export or feed it to cattle.
“We have to find ways to attract that barley to our plants. That’s getting extremely difficult under the current circumstances.”
He later said a good growing year that supplied enough high quality barley for everyone would solve a lot of the problems.
Cuthbert said the pool account does send strong signals to farmers to grow malting barley and farmers have listened. Traditionally malting barley has been one of farmers’ best paying crops.
“It’s hard to see where there’s a real problem here,” said Cuthbert, who pointed to the Coors Molson beer company merger and their announcement they were closing a malting plant in the U.S. and moving it to Canada.
Con Johnson, a Saskatchewan farmer and member of the wheat growers association, said farmers need price production contracts where growers can lock in their price and time of delivery.
His association later voted to lobby the federal government to allow farmers to sell directly to domestic malting companies without the wheat board’s involvement.
