CWB official believes acres will grow nine percent this year as a response to a shortage in high quality malting grain
Malting barley production in Western Canada is expected to rise in 2015, thanks to tight North American supplies and attractive contract prices.
However, it remains to be seen whether the increased area will be sustained over the longer term.
Canada’s barley production has fallen steadily in the past few years, in step with increased production of oilseeds and other feed crops.
Bruce Burnett, market analyst with CWB, said he expects Western Canada’s malting barley acreage to rise nine percent this year.
However, that increase will have only a marginal impact on overall North American supplies of top-quality malting grain.
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Statistics Canada says prairie farmers planted 5.5 million acres of feed and malting barley last year.
Fewer than five million acres were harvested as grain last year, well below the five-year average of 5.65 million acres.
Burnett said global markets for top-quality malting barley received relief recently from the new Australian crop, which came off in decent shape.
“Because the Australians have just finished with their harvest and they had reasonable good quality … (the global market) is fairly well supplied right now,” he said.
“But as we move into the next crop year, especially given the fact that North America had very poor quality on the U.S. side as well as on the Canadian side, supplies are going to be limited. When we hit new crop positions, especially for North American purchasers, it’s going to be quite tight for them, so that’s why I’m quite positive on barley.”
Burnett said Canadian carryout stocks will be tight this crop year and next, even with a nine percent increase in acreage next year.
“That is going to result in just a modest increase in … production and that … is going to leave the barley market fairly tight next year,” he said.
“We’re going to end with carryout this year of less than a million tonnes … and we might be on track to have carryouts of a similar or even a smaller amount next year. That’s something to keep in mind as we go into the spring season here. Malting barley might produce better returns than we’ve been used to in the past, just because of the tightening of those stocks.”
Despite a rapidly increasing global demand for beer and malt, production of malting barley in Western Canada has been falling, said Peter Watts, executive director of the Canadian Malting Barley Technical Centre in Winnipeg.
Malting barley acres dropped to slightly more than three million last year, down almost 65 percent from 8.6 million in 2002.
Those numbers are a stark contrast to global beer production, which has increased 50 percent to nearly two billion hectolitres during the past 15 years, Watts said.
Much of that growth is the result of higher consumption in South America, Africa and Asia, specifically China.
Canada is not the only country to reduce its barley production.
Global production was estimated at 140 million tonnes last year, in line with the 10-year average.
Watts said several factors are discouraging production in Canada, even though Canadian malting barley fetches a premium on global markets and is recognized as a top-quality product by end users.
“There’s a lot of competition from other crops,” Watts told barley growers at CropSphere in Saskatoon Jan. 14.
“Malting barley is a tricky crop to grow and it’s also a tricky crop to market in terms of quality. So producers, I think, tend to get a little bit frustrated when they’re trying to market their barley.”
Malting barley acreage in Western Canada may not increase appreciably over the long-term until new, higher yielding varieties are grown by more farmers and used more widely by global maltsters and beer makers, he added.
“There are a number of things that can be done to boost acreage, but in my view, one of the biggest factors is uptake of new varieties,” Watts said.
“We’ve got some great new varieties that are coming. They’re higher yielding, they have better agronomics and they’re just as good or better quality wise than some of the older established varieties.”
Watts said the technical centre needs to promote Canada’s newer varieties more aggressively to global buyers who have become accustomed to the quality and consistency of established varieties such as Copeland and Metcalfe.
brian.cross@producer.com
