Category: Members Market Updates

Category: Members Market Updates

Malting Barley Market Outlook for 2020-21

29/04/2020

The coronavirus pandemic has disrupted markets and has the potential to negatively impact supply chains. The following offers some perspective on prospects for malting barley and malt demand in 2020/21 in light of the potential contraction in the global brewing sector.

The world’s malting and brewing industries are facing some very challenging circumstances in light of the corona virus pandemic which will inevitably result in a drop in global malting barley use for beer production in 2020. According to the National Bureau of Statistics of China, beer production volume in China fell by -40% year over year in the first two months of 2020, which would represent roughly 5% of total annual production.

Mexico, the world’s 4th largest beer producer, temporarily suspended beer production in early April, and Heineken, the world’s second largest brewer, recently reported a -14% drop in beer sales in March. In North America, the loss of beer sales at concerts and sporting events has been partially offset by an increase in off-premise sales, with Nielsen reporting a +41% increase in U.S. retail beer sales during the week of March 15th compared with a year earlier, but there is little doubt the beer sector will experience a contraction this year, the question is how significant it will be.

In China, by far the world’s largest malting barley import market, the medium-term impact on beer consumption will depend on the speed and extent of their economic recovery, in particular the re-opening of bars and restaurants that constitute the bulk of China’s beer sales. With a similar beer culture in Japan, where most beer is consumed outside the home, consumption is hard hit, however other Asian countries may not be impacted to the same extent. Countries like Vietnam and Cambodia, which have large populations and relatively high per-capita beer consumption rates, tend to consume beer at home.

The global brewing industry requires around 25 MMT of malting barley a year, so a -10% contraction in total global beer production would translate into 2.5 MMT drop in malting barley demand. If countries can re-start their economies later this spring, the impact may not be as severe as had been feared, although there has already been some significant damage done to the beer economy and no one in the value chain expects to come out of this unscathed in 2020. For Canada, as one of the world’s largest malting barley and malt exporters, there is little doubt we will feel the impact of the global contraction in the beer sector.

US craft sector to be hard hit

In the United States, a recent survey indicated a majority of craft brewers could face the prospect of closing their doors within 3 months if the shutdown remains in place. Smaller craft brewers tend to rely heavily on on-premise sales, which is why they are hit particularly hard. And while many of these brewers are small, and represent only a fraction of overall U.S. beer production, the craft industry in general is being heavily impacted by the current situation which is worrisome for Canada as the craft industry represents an important market for Canadian malt. From purely a volume standpoint, the biggest impact on beer consumption in North America is likely to be the lack of sporting events, festivals and concerts, and this will be felt primarily by bigger brewers. With the absence of beer consumption in bars and at events, it is not surprising therefore that there has been a bump in retail beer sales. But this is unlikely to offset the drop in sales in establishments and at events. A -10% drop in overall US beer production in 2020 would translate into a reduction in malting barley demand to the tune of 300 KMT, not an insignificant figure. The US is Canada’s largest market for processed malt taking 50% of annual export sales, and the beer industry there is under severe strain with reduced malt purchases from Canada now a given.

China beer production resumes

In China, the world’s largest beer producer and malting barley importer, the majority of beer is consumed in commercial establishments, and as a result the impact on the beer sector so far in 2020 has been severe with reports of a -35% drop in beer production for the first quarter to 55 million hectolitres. And while China’s economy is slowly restarting, many commercial establishments remain closed, keeping a lid on beer consumption in the short term. A -10% contraction of overall in beer production in 2020 would translate into a drop of about 350 KMT of malting barley demand, and since China imports virtually all of its barley needs this would certainly impact global malting barley trade which is around 4.5 MMT annually.

On the positive side, anecdotally, very recent reports indicate that many malting and brewing companies in China have resumed production. China Resources Beer, China’s largest brewing company, indicated on March 20th that the company's beer output is back to 95% of production levels prior to the coronavirus outbreak, and they forecast beer sales in restaurants and nightlife channels to recover by May 2020. Moreover, China’s beer industry had been shifting toward more premium beer in recent years, requiring not only more malting barley, due to reduced use of adjuncts, but also more good quality barley, which has boosted purchases of Canadian barley with exports topping 1 MMT for three years in a row, and which should continue to be supportive of malting barley demand in China in the future.

At the end of the day, while there is little doubt use of malting barley will be down in China the coming year, and Canada will feel a hit (barring a production issue in another country), the impact is not expected to be as severe as was feared 6 weeks ago, assuming a gradual re-opening of China’s economy over the course of the Spring.

 

 

Canada Barley Update

15/02/2020

In 2019 Canada harvested its largest barley crop since 2008 at 10.4 million tonnes (MT), a remarkable increase of 24% over the 2018 crop of 8.4 MT, the result of a 12% increase in barley seeded area last Spring combined with a 12% yield bump.  In spite of the bigger crop, the extraordinarily wet harvest of 2019 resulted in a reduced selectable supply of malting barley estimated at around 2.3 MT compared with well over 3 mln tonnes in each of 2017 and 2018 (although not all of the available supply was selected in those years).  With the domestic malting industry in Canada using roughly 1.0-1.1 MT of malting barley annually, Canada's malting barley export program this year will likely come in just over 1.0 MT, compared with ~1.4 MT last year, and ~1.3 MT in 2017-18.

The following are some of the major points with respect to the Canadian and global barley production in 2019-20:

  • Global barley production in 2019 was 156.1 MT compared with 138.9 MT in 2018, an increase of 17.2 MT or 12%. This was the result of increases in other regions as well as Canada including:
    • EU barley production rose to 62.8 MT, an increase of 6.9 MT or 12.3% from 2018;
    • Russia barley  production increased from 16.7 MT to 20.0 MT, an increase of 3.3 MT or 19.5% from 2018;
    • Ukraine barley output rose from 7.6 MT to 9.5 MT, an increase of 1.9 MT or 25% from 2018.

In Australia, where drought has reduced crop output for three years in a row, barley production dropped slightly this year to 8.2 MT from 8.3 MT in 2018, well below the average of 9-10 mln tonnes of recent years with seriously compromised this year due to the dry conditions.  The drought affected Australian barley crop and resulting smaller supplies the past couple of years has created opportunities for Canada in markets like China, Japan and even the Middle East for both malting and feed barley, although it was the smaller barley crop in Russia and Ukraine in 2018 which enabled Canada to be competitive on feed barley into the region that year.

One of the most important developments in the past two years has been the growth in sales of Canadian feed and malting barley to Japan. Feed barley exports to Japan ballooned to about 250,000 T in 2018-19, up from 50,000 T in 2017-18 and virtually nothing in 2016-17.  In 2019-20 Canada is en route to doing another healthy feed barley program to Japan, likely topping 200,000 T. Canada has also sold ~40,000 T of malting barley to Japan over the past two seasons, business that was normally reserved for Australia.  Overall in the current year, Canada' barley export program to Japan may surpass 300,000 T, a little lower than the 350,000 T last  year, which again will include feed and malting barley as well as the traditional barley tea business.

Another interesting export destination the past two years has been Argentina which purchased 12,000 T of malting barley in 2018-19 and another 16,000 T  this year.  Clearly malting barley quality in Argentina has been an issue and presumably malting companies are sourcing Canadian to meet the demand of specific brewer customers.

Canada also sold ~160,000 T of feed barley last year to the Middle East (Oman, Dubai, UAE), surprisingly able to compete with the Black Sea where Russia and Ukraine has smaller crops in 2018, something which will not likely happen often, expecially with feed barley prices holding firm domestically.

With regard to the domestic market, in spite of the large barley crop this year, and increased supply of feed grains in W. Canada, domestic feed barley prices have been remarkably resilient.  Reduced supplies of corn from the US and the eastern Prairies have helped support Lethbridge feed barley values which dropped to $4.50 after harvest but have since rebounded to around $5.

Overall, in spite of the awful harvest conditions this year, the situation in W. Canada's barley market has been reasonably positive in 2019-20 with a good export program (CGC weekly exports indicate 1.150 MT at week 27 compared with 1.200 MT last year at this time) and decent overall movement (producer deliveries are over 200,000 T ahead of last year at 2.266 MT at week 27).

Looking to 2020-21, AAFC has their preliminary projections for seeded area steady from this year at 2.9 mln hectares, although production dropping back to 9.5 MT based on trend yields.  As Canada will have virtually no malting barley carry out, we will need a good growing and harvest season to replenish supplies and be in a position to continue to service our traditional customers and hopefully a few newer ones along the way.

 

CMBTC Crop Progress Update

04/10/2019

The harvest in Western Canada continues to face extraordinarily challenging conditions as record breaking snow storms covered southern Alberta and parts of Saskatchewan earlier this week. The enormity of the storm and the accumulation of rain/snow across the prairies brought everything to a standstill, prolonging an already delayed harvest.  Temperatures last week were in the single digits, well below seasonal averages, although they are forecast to return closer to seasonal levels later this week before dipping again next week.

The problem now is that many fields are so wet they cannot sustain the weight of the combines. This is different from summer rains when the ground dries out after a few days. Many fields are saturated and this is resulting in further degradation of crops. What remains in the fields will mostly be of feed quality, limiting the supply of malting barley this year.

The story of this year’s harvest is that while quality has been severely compromised by wide spread rains and cool temperatures across the prairies, there are pockets of good quality malting barley where farmers were able to get the crop off in good condition.  Early quality indications are mixed with very low proteins reported in some areas (e.g. 9-10%) contrasted with other regions where protein is on the higher end (12-15%). Reports are of generally lower than average test weight and plump kernels, with many regions seeing sprout damage although germination levels are strong at this time. Farmers are also reporting high yields and little in the way of fusarium/DON present in the 2019 crop.

As much as possible, producers with malting barley at high moisture levels, that is otherwise sound, will want to get their barley into aeration bins to preserve quality, or optimally have it dried down to 13.5% moisture. Pre-sprouted barley may still qualify for malt if levels are low/moderate, particularly for the domestic malting industry who can process the grain quickly, so producers should check with their local elevator or malting company selector regarding options.

Alberta

There was heavy snowfall in the southern region of the province earlier this week, registering over 50 cm in the Lethbridge area. The wet conditions in most of the other regions brought harvest activity to a standstill. Wet/snowy conditions were also prevalent in the mid and northern regions of the province. The harvest will continue to be slow and farmers will struggle to get the crop into the bin. All the grain is tough and will have to be dried, which is a costly and time consuming exercise. Unfortunately, most of the crop remaining in the fields will be feed quality as too much wet, cool weather has degraded the barley.

  • Southern region (Lethbridge, Strathmore, Foremost): This region received over 50 cm of snow which completely shut down all harvest. The forecast is for primarily sunny and dry conditions over the next week.
  • Central region (Rimbey, Airdire, Olds): Snow and rain stalled harvest in this area and cool wet conditions have been a constant for the last month. Farmers have struggled to harvest their barley crop and should have roughly 60% completed by the end of September.  The forecast is for drier, warmer weather in coming days, which should permit farmers to get back into the fields, although next week temperatures will drop again to below normal, with the potential for more moisture and even snow next week. The remainder of the harvest will be a struggle and the remaining barley will be tough and mostly of feed quality.
  • Northeast region (Vermillion, Camrose, Provost): Cool and wet weather has delayed harvest however the weather pattern has improved somewhat with drier, warmer temperatures later this week, approaching more seasonal daytime levels for the weekend. This stretch of dry weather will allow farmers to resume harvest operations. According to the Alberta Crop Report only 8% of the harvested barley to date is eligible for malt barley. Most of the remaining barley will be feed and will be harvested tough and have to be dried.
  • Northwest region (Barrhead, Edmonton, Leduc): Harvest is progressing slowly due to uncooperative weather conditions with only about 30% harvested to date, and last weekend’s snow/rain further slowed harvest progress. The weather improved in the latter part of this week and while the forecast is for more seasonal temperatures in coming days, continued intermittent rains will continue to slow harvest progress. To date, much of the harvested barley has been feed grade. Similar to the other regions, the grain is harvested tough and will have to be dried.
  • Peace River region (Grand Prairie, Fairview): Scattered light showers and wet, cool conditions over the last week limited the amount of acres harvested. Drier conditions and more seasonal temperatures are forecast for the weekend, but there is more rain in the forecast for next week which will simply add to the delays in this year’s harvest and compromise quality prospects.

Saskatchewan

A stretch of warmer and relatively dry weather will enter most regions of the province this week and temperatures will be closer to the normal seasonal range. This will be an improvement over this past week when most regions were hit with snow or rain. The southwest corner of the province received 40 cm of snow, while the areas between Saskatoon and Regina and the north-central and northeast region up to Yorkton and south into Moosomin also received snow. This wet, snowy weather stalled the harvest again, which will require several consecutive days of dry, warmer weather to all harvest to resume.

As of September 30, the barley harvest is currently 68% complete according Saskatchewan Agriculture, with the southwest (78%) and northeast (81%) regions most advanced. Crops have been slow to dry down in the fields due to the frequent rains. The majority of the crop is tough and is being put into grain dryers and aerations bins. Much of the later harvested barley has a high chit count and will not be accepted for malt.

  • Southwest region (Swift Current , Maple Creek): Snowy/wet conditions slowed down harvest but warmer, dry weather is moving into the region, which should get farmers back in the fields. Over 75% of the crop is in the bin, however the harvest is likely to drat out to mid month. Most remaining harvested grain will be tough and have to be dried.
  • Southeast region (Regina, Weyburn, Moosomin): Harvest delays have been a common theme in this region due to cool, wet conditions and last weekend’s snowfall shut down harvest. Still farmers have managed to get more crop off between rains but it has been a struggle to harvest with the muddy conditions and equipment breakdowns. Dry, warmer weather has entered the region and forecast to continue through the weekend and into next week which will help farmers progress.
  • Northeast region ( Melfort, Tisdale): Farmers have done a remarkable job of harvesting between rain events with 80% of barley harvested, but the rain and snow this last weekend shut down progress. Dry, warmer weather has moved into the region and is forecast to continue into next week which will give farmers a good opportunity to resume harvest, however most of the later harvested barley will not make malt due to excessive chit count.
  • West Central region (Saskatoon, Rosetown, Kindersley): Harvest progress resumed later this week as drier conditions have entered the region with day time temperatures approaching seasonal averages of 15°C. The barley harvest is about 60% complete.
  • East Central region (Yorkton, Kamsack):  Lingering rains and cool temperatures earlier this week kept harvest to a near standstill, however the weather is to improve on the weekend with warmer, dry weather entering the region which will enable farmers to return to their fields.
  • Northwestern region (North Battleford, Lloydminster): This region is only about 55% harvested as snow and showers have hampered harvest operations, but farmers have made progress when the weather permitted. Frequent rains are recharging soil moisture but creating trouble for unharvested crops. Generally drier, warmer weather is forecast into next week, however rains expected on Friday may set the harvest back another few days.  Barley quality is deteriorating quickly under these conditions and the remaining unharvested crop is being downgraded due to mildew and sprouting.

Manitoba

The barley harvest is largely done in Manitoba, but the province continues to be punished with ugly weather conditions. Having rained seven of the last ten days, there has been little opportunity for farmers to enter their saturated fields with reports of a number of combines sunk to the axels in fields.  Farmers in Manitoba were able to harvest a good chunk of barley before the rains began in early September and as a result there was some nice quality malting barley produced. Reports are of good yields and higher protein levels this year compared with 2018.  Most of the later harvested barley will be relegated to feed.
Contributed by Pat Rowan

Canada Barley Production Outlook 2019

24/04/2019

As seeding approaches in Western Canada, industry pundits are busy making forecasts for 2019 crop areas. The industry is projecting barley seeded area to rise given strong prices for feed barley, reasonable values for malting barley and very low overall barley carryout this year. The most recent Agriculture & Agri-Food Canada report, released April 16, forecasts barley area in Canada will increase by 14% in 2019 to 3.0 mln hectares (7.4 million acres), with production projected at 9.7 million tonnes.

Most people in the industry, however, expect a more modest increase in area, closer to 5-10%, with production expected to rise to between 9 – 9.5 million tonnes (compared with 8.4 million tonnes in 2018). At the CMBTC we are expecting a 9% increase in area, with production forecast at 9.3 million tonnes.

 

StatCan; AAFC; Forecast by CMBTC

Sources: StatCan; AAFC; Forecast by CMBTC

 

BARLEY SEEDED AREA IN WESTERN CANADA

In 2018, malting barley accounted for 56% of total barley seeded area in Western Canada, or 1.41 million hectares (3.5 million acres), with the balance in general purpose varieties (primarily feed). For 2019, the CMBTC expects both feed and malting barley area to rise, with malting barley area to account for 55% of barley seeded area in Western Canada, or 1.57 million hectares (3.9 million acres).  Based on trend yields of 3.59 tonnes/hectare (66.7 bu/acre), this will result in about 5.0 million tonnes of malting barley production.  Assuming 60-65% of malting barley meets malt specifications, this would mean a supply of 3.0-3.25 million tonnes of malting barley in the coming year.

 

CGC; Forecast by CMBTC

Sources: CGC; Forecast by CMBTC

 

AREA BY VARIETY

The two most dominant varieties in the past 20 years have been CDC Copeland and AC Metcalfe, and today these remain the two most popular varieties grown for the domestic and export markets. In 2018 CDC Copeland accounted for over 45% of malt barley seeded acres while AC Metcalfe fell below 30% for the first time since 2002. AAC Synergy, which was registered in 2012, has been gaining traction in the past few years and in 2018 area jumped to over 10% of total seeded area to malt barley, solidifying its place as a mainstream Canadian variety. Newdale continues to be a variety that performs well for producers in certain regions, retaining around 2% of seeded area.

In 2019-20, the trend for declining AC Metcalfe acres and increased AAC Synergy acres is expected to continue.  The strong feed market is supporting Synergy acres in particular, given the variety’s impressive yields.  The domestic malting industry in Canada is now using AAC Synergy to varying degrees in their operations, and markets outside Canada have started to purchase the variety.  Still, producers should check with their local malt buyer about contracting and moving this variety, unless they have ready access to a feed market.

 

Seeded area by variety as a % of total malting barley seeded area in W. Canada

CGC; Forecast by CMBTC

Sources: CGC; Forecast by CMBTC

 

NEW VARIETIES

Canada also has a suite of promising new malting barley varieties that are being introduced and tested in both the domestic and export markets. Two of these varieties that will be available in limited commercial quantities for the first time in 2019 are AAC Connect and CDC Bow.  Information on their quality profile can be found on the CMBTC website here: Variety Quality Overviews

Additional new varieties such as CDC Fraser, which is suitable for markets like China with high enzyme requirements, and Lowe, which is tailored for the all-malt (or craft) brewing sector, and are also currently being scaled up and will be ready for production trials this fall.

Gaining acceptance of new varieties can be a difficult process, with end-users understandably hesitant to change what is already working. But new Canadian varieties all meet or exceed minimum quality requirements established by the industry, and also offer improved agronomic performance and better resistance to disease, boosting yields and quality, and ultimately making Canadian malting barley more competitive both in the field and the market place. As a result, end-users should test and evaluate these new varieties, identify which ones meet their quality requirements and signal their preferences back along the value chain. Interested end-users can contact the CMBTC for quality data and samples of new varieties.

Meanwhile, Canadian malting barley producers are busy test driving these new varieties in the field to see which ones have the greatest success on their farm.

BARLEY MARKET REPORT

04/02/2019

Jan 21, 2019 - We have entered the time of year when the farm shows are in progress. The Crop Production Show in Saskatoon just finished and the Brandon Ag Days will begin this week. Traditionally this is when the maltsters and grain companies reveal pricing ideas for their malt barley programs. Farmers anticipate malt barley prices to begin at a minimum of $5/bushel (bu) and higher. There was not much in the manner of published prices from the Saskatoon Show, however $5/bu was indicated for Sept/Oct. by some exporters and one maltster began its new crop program at $5.25/bu.

To recap, the barley market has generally been good to barley farmers this past crop year. Malt barley prices have ranged from a low of $230/tonne ($5/bu) to a current price of $268/tonne ($5.85/bu) for June/July delivery. The feed barley market has also traded at attractive price levels throughout the year and it is presently trading at $255/tonne in Lethbridge. The new crop bid is $220 ($4.75/bu) for Sept/Oct delivery. The situation for the feed, malt and export market will bring the barley carryover close to 1 million tonnes or less, which reflects the current higher feed prices.

On the export side, weather issues in Europe and Australia permitted Canadian malt and feed barley exports to move into China, Japan, Kuwait, the United Arab Emirates and Oman. While exports to China lag last year’s record pace (470,000 vs 557,500 tonnes), sales to Japan at 183,200 tonnes in the first five months already well exceed last year’s total program of 115,600 tonnes.

However, for new crop the scenario may be different. While Europe suffered through a drought-filled year, plagued by record high temperatures and lack of rains which dramatically reduced their crop production, in the coming year Europe is expecting production to recover, with barley stocks to increase by 11% and wheat by 15% over last year's numbers. This will create increased supply of grains in Europe where the country will have to hope for larger domestic usage and better exports to reduce the anticipated large carryover of barley and wheat. Naturally, the numbers are based on normal weather patterns. Australia is also forecast to produce a larger barley crop for this coming crop year. The Black Sea region, Russia and Ukraine are projected to have larger cereal crops next year and they are traditionally very aggressive in marketing their cereal crops. Providing there are no crop wrecks anywhere this coming year, barley supplies are expected to return to move historically average levels.

With respect to barley acres this coming year in Canada, they are generally expected to increase slightly and there are a few points to consider regarding new crop prices. With barley carryover around one million tonnes, there will be early demand for barley for both the malt and domestic feed industry. Prices for malt barley will likely range between $5 and $5.50/bu. Farmers who traditionally produce malt barley will probably continue to seed a malt barley variety. For farmers in southern Alberta, northern Alberta and some regions of Saskatchewan, it may be more attractive to seed feed varieties. Farmers that can produce 60 bushel-per-acre (bpa) wheat may be more inclined to seed it, as some companies have priced new crop wheat at $7/bu. and although most prices are in the high-$6-plus, there is always an element of optimism when it comes to wheat prices. Clubroot has become a serious problem for canola. Some farmers may attempt to return to a more normal crop rotation to eliminate this disease and some canola acres could shift to barley acres. Farmers will have to decide if $4-plus feed prices and $5.25-$5.50/bu malt barley work into their farms’ financial plans.

The political problems that plague the world are affecting the fundamentals for grains. As stated before, the United States (U.S.) is buying domestic barley only for their beer industry and this has pushed Canadian barley out of the U.S. market. Will the U.S. trade war with China make U.S. corn and DDGs cheaper and more competitive in Canada, therefore pressuring barley prices this summer and for new crop? Eventually the trade war will get resolved; what it will have done to grain prices before it concludes is impossible to predict.

Barley Market Report

09/01/2019

The Canadian barley export market continues to be very vibrant, with exports from August 1 – December 31 at 954,000 tonnes (T). This compares with 772,000 T last year at this time and the five-year average of 519,000 T.

China continues to be the most dominant buyer, importing over 500,000 T since August 1 of feed and malt barley, the majority being malt. Our second largest customer was Japan (136,000 T) and then Kuwait and the United Arab Emirates (UAE) (105,000 T of feed barley).

There will be more sales executed through January forward and China remains a buyer of malt barley for positions April through the summer months, providing Western Canada has sufficient barley to market.

Canadian malting barley sales now are primarily focused on the domestic market, which purchases roughly 900,000 T per year, and the export market that is dominated by China. The United States (U.S.) market, which in the 2000s bought over 250,000 T per year, has significantly cut its imports of Canadian barley in recent years. This past year, with the Buy America campaign, they are contracting virtually no malt barley from Canada.

On the feed barley export side, with Canada excluded from trading into Saudi Arabia, other destinations have emerged this year such as Kuwait and the UAE. Reduced barley export supplies from Australia and Russia this year are creating opportunities for Canadian global feed barley trade.

The domestic feed market continues very strong and feed is now trading in the $251 T-range for January. A limited amount has traded into June at $258 T. A combination of the feed usage and good export demand is projected to take Canada's barley carryover down to 1 million T, a number unheard in the Canadian Wheat Board days as they protected the market and would not permit the carryover to dip to these tight levels.

On the export malt barley side our biggest competitor is Australia, which to the end of December had traded 5.4 million T of barley into China and shipped 6.1 million T for the 2016/17 crop year, during which China imported 8.9 million T. However, a recent anti-dumping suit investigation launched by China into Australian feed barley may preclude Australia from shipping additional barley stocks to China this year. This would potentially give Canada an opportunity to export more barley to China in 2019. However, given that China imports nearly 70% of its barley from Australia, this issue should get resolved quickly. Australia, similar to Canada, is not known for purposely selling grain under world values.

Europe had crop issues this year and so is not a major competitor on the global malting barley market. Recent rains have helped alleviate dry conditions that affected parts of eastern and Northern Europe last summer, and have boosted river levels which is helping with the intra-European Union barge movement.

After harvest delays due to rain in December, Argentina had harvested 88% of its barley crop as of January 2 and the early forecast had been for a 3.8 million T crop. However, if yields continue to surprise to the upside, crop production could reach 4 million T which would be a 9% increase over last year's production. Early indications suggest higher than average protein levels (e.g. 11%). Argentinian farmers only seed malt barley varieties, the major one being Scarlett. Argentina traditionally supplies other South American countries with malt barley, especially Brazil and Colombia. For the past four years Argentina has averaged over 2.5 million T of exports, mostly malt barley into South America with some feed and/or malt going to China and some feed barley going into Saudi Arabia.

Crop Progress Update – October 16, 2018

15/11/2018

Harvest progress over the past three weeks has been painfully slow in Western Canada. The weather has been abysmal. Snowfall, frost, and rainy wet conditions have made harvest a nightmare. Farmers in all three provinces have been stymied by the inclement weather conditions which in many areas prevented them from entering their fields.

The unharvested barley acres, which have been subject to relentless wet conditions, will certainly dash the hopes of many famers of having their barley accepted as malt barley. With the outlook for warmer, dry conditions over the next week, there is always hope that some of the late seeded barley that is still standing could meet malt specifications, however the reality is that most of the unharvested barley will be downgraded into the feed category.

The wet conditions certainly reduced the amount of available malt barley that will be offered to the export market.  Prior to the rain and snow, it was estimated there would be 3.5 million tonnes of malt barley available for the domestic and export market. Now we will have to wait for the final number when harvest is complete, but there is no doubt that the crop remaining to be harvested will not result in much additional malt barley.

Even with the poor harvest conditions, Saskatchewan is the one bright area that produced some good malt barley tonnage. There is still optimism that Canada will easily surpass one million tonnes of malting barley exports this crop year. Recently exporters have raised their prices in the country trying to increase their barley purchases to ensure adequate supplies for our export markets, particularly China.

Alberta

Of the three western provinces, Alberta has been the most severely affected by the weather issues. Normally Alberta is 85% complete at this time of year but presently it is slightly less than 50% done. Team Alberta, which comprises the Alberta wheat and barley commissions, Alberta Pulse Growers and Alberta Canola, is alerting Alberta Agricultural officials that there is over $3 billion in crops that remain in the field. They want to make sure that government agencies are prepared to respond promptly to unharvested acre claims and to consider all options to help farmers deal with a difficult harvest. Presently, there is still more than seven million acres to be harvested in Alberta, with the majority of the acres in the middle and northern tier of the province. All areas of the province struggled the last few weeks to advance in their harvest.

  • South: This area is normally doing fall work at this time of year and it resumed harvest Monday afternoon. Their forecast looks good for the next two weeks and they should easily complete the harvest of the last seeded barley and other crops still in the fields.
  • Central: This area has been stalled with snow cover and little progress has been made in the last ten days. There is great harvest weather is in the forecast starting today and well into next week which should give farmers a great opportunity to harvest their crops.
  • North: This region has less than 50% of their barley harvested as conditions have been awful for the last month with snow, frost and rainy weather plaguing this region. The weather forecast is for good warm weather for the next ten days.

Saskatchewan

In Saskatchewan, the crop is slightly over 80% harvested and there is warm dry weather in the forecast for the entire week with day time temperatures in the mid- to lower-teens. This should give farmers in most regions of the province the opportunity to harvest the remainder of their crops. The area that is most at risk is the northwest section, which has been hit with excessive wet conditions consisting of snow, rain and frost. Most, if not all, of the barley in this area will have to be dried. The southeast and southwest corners of the province are within days of completing their harvest.

The forecast in the northeast corner of the province, where farmers have harvested 65% of their crop, is for a warm dry week which will likely support a huge jump in harvested acres. Some farmers in this area have not turned a wheel in the last three weeks. The west-central and east-central regions are also roughly 65% completed in their harvest, however the warm weather forecasted for this area in the next week will give farmers the opportunity to get their combines rolling.

Manitoba

For all intents and purposes Manitoba has completed the harvest with barley production estimated around 500,000 tonnes this year with generally favourable results for malting barley.  Much of the remaining barley that is being harvested is wet, which is testing farmers’ abilities to dry their crops and causing additional costs. Those who do not have dryers are relying on the commercial grain terminals to dry their crop, however some of the inland terminals do not have functioning dryers and others have refused to accept any more grain to dry at this time as they are overrun.

CMBTC Crop Progress Update – August 23, 2018

13/09/2018

Harvest is advancing quickly, especially in the southern regions of the Prairies. Combines are also rolling across the central and northern regions of the Western provinces. Conditions are near ideal for harvest with the recent hot and dry weather. Crops are drying quickly which will give the farmers uninterrupted access to harvest their crops. Barley harvest should be completed by the first weekend of September.

The long-lasting dryness that lingered over the Prairies through the growing season will and has severely reduced yields. The early barley yields have been below expectations due to the dry and overly hot weather. To date, the majority of the regions have indicated that their yields are 10% to 50% below average. The 50% reduction has occurred in southern Alberta, which suffered through extreme heat stress and minimal rain. There were expectations, in mid summer, that the Prairies could have above average yields, however those thoughts have been forgotten as the early harvested barley fields are yielding below average crops. Also, the prospects for the later harvested fields to yield above average yields are not optimistic. Only a few areas, such as around Tisdale, have produced average yields.

In last month's supply demand update from Agricultural Canada, there were projections of of 8.5 million MT barley crop, up 600,000 MT from last year, due to higher seeded acres. With a combination of variable weather and rainfall, it remains to be seen where Statistics Canada pegs actual barley output in its first crop production report, due at the end of this month. Conditions were quite variable across all regions over the summer so final yields and production estimates are uncertain at this time. The thought is that the crop size will be closer to 8 million MT, which will tighten the domestic barley supplies, meaning cattle feeders will have to supplement with corn, brought in from either the U.S. or Manitoba. The smaller barley crops globally should enable Canadian barley exports to surpass the two million tonne mark this marketing year.

Feed barley for September through December delivery in Lethbridge is currently priced at around C$250 to $255MT, and some offers have been as high as $260/tonne for December. In comparison, corn delivered to Lethbridge for October through December is currently sitting around C$252 to $254/tonne, with January to March delivery at $262 to $264. This year the wheat and durum crops will be of high quality, similar to last year. Therefore there will be little wheat or durum entering the feed market. U.S. corn and dried distillers grains (DDGs) will have to enter the feed market to fill the void created by the tight barley crop.

Canada isn’t the only country where barley production has suffered. Output is also expected to be down in other major exporting countries including Australia, Russia, Ukraine and the European Union. This reduced world barley production and strong global demand for both malt barley and feed barley have moved the prices for Canadian barley up by $20US/MT in the last few weeks.

-- Contributed by Pat Rowan

CMBTC Crop Progress Update – July 18, 2018

19/07/2018

This past week crop conditions are on the decline, hot dry weather was the norm across Western Canada. The southwest region of Saskatchewan and southeast region of Alberta remain the driest section of the Prairies. The recent rains of June, which contributed to overall soil moisture levels getting replenished, have been dried out by the hot July temperatures. A week-long heat wave blanketed most of the Prairies and benefitted some crops, however the crops that were struggling were negatively affected. Further rains will be required to prevent the crops from further damage. Rains have faded from the weather forecast and the Prairies are left with hot and dry weather for this coming week. At the end of June, we had the prospects of a large barley crop, well over 8 million metric tonnes, however there is apprehension about the stress the crop will suffer from the hot and dry weather through July and August. Unless the Prairies get some timely rains to finish the crop, the barley harvest will be smaller than the present estimates.

WESTERN CANADA

Alberta

The forecast for the next week to two weeks is hot and dry with above normal temperatures and below normal rainfall. The southern part of the province is the most severely affected region. Crop ratings for the entire province were lower for all regions this past week.

  • South: Calgary/Lethbridge – This region continues to get only spotty rains. The area has been stressed by hot, dry temperatures throughout the growing season and the next two weeks the forecast is for hot and dry with temperatures reaching in the mid 30s°C, which will certainly reduce the yields and quality of the barley crop in this area. Many farmers are presently contacting the malt companies and indicating their crops will not make the malt specifications. This is the second consecutive year that this region has been in a drought situation. This region is highly coveted by the Canadian maltsters and exporters, as well as ABI and Malteurop in Montana, for the high quality malt barley and the high volume of tonnage it normally produces.
  • Central: Lacombe – The weather remains hot and dry with the chance of isolated showers and potential for hail. The crop still remains generally good, but it needs rain to get it through the hot weather.
  • North: Vegreville – This area is getting hot for the week with temperatures ranging in the mid-30s with potential for severe isolated rain showers and hail. The isolated heavy rainfalls will produce localized flooding. The crop in this region is generally in good condition and is the best of the entire province.

 

Saskatchewan

Crop conditions are mixed over the past two weeks. Scattered rains did benefit the central and northern parts of the province. Most of the areas suffered from lack of rain. The majority of the crop damage that was inflicted this week was due to lack of moisture, high winds, hail and localized flooding.

  • East Central: Melfort – The region received hot weather and localized thunderstorms this week. Crops are advancing quickly and are in good condition, however some have begun to show signs of  heat stress, especially in areas that have missed the scattered showers. Rainfall in the region was variable, ranging from nil to 72 mm. Topsoil moisture remain similar to last week. Cropland topsoil is rated a 6% surplus, 54% adequate, 33% short and 7% very short.
  • Northwest: Saskatoon/Lloydminister – Crops are quickly advancing in this region, with the majority of them in good condition. However, recent high temperatures and lack of significant moisture have caused some damage. The area will require rain in the next week in order for heads and pods to fill adequately. Scattered storms did move through the region last week, bringing strong winds and hail to some areas. Rainfall was beneficial improving the topsoil conditions slightly, the rating is 81% adequate, 16% short and 3% very short.
  • West Central: Saskatoon – The region experienced warm temperatures, strong winds and some hail this past week. The crops are advancing well, but they could benefit from another rain. Scattered rainfall ranged from nil to 52mm, benefitting some fields and completely missing other fields. Topsoil moisture is rated the same as last week at 75% adequate, 21 % short and 4% very short.
  • Southeast: Weyburn – Crops are advancing quickly, in the region, and have remained in generally good condition despite a hot and humid week. Spotty thunderstorms brought moisture and some hail to parts of the region, but other areas are still in need of moisture in order to fill heads and pods.
  • Southwest: Swift Current – This area remains the driest in the province. Yields and quality will be negatively affected due to the lack of sustained rainfall.
  • Northeast: Yorkton –  Crops are quickly advancing in this region thanks to recent rain and heat. Overall, the crops remain in good condition. Crops will require more rain in the next weeks to fill heads and pods.

 

Manitoba

It has been a hot and dry week with precious little rainfall for the entire province. Spotty rains have resulted in variable soil moisture reserves and crop conditions. Above normal temperatures and below normal rainfall are in the 6 to 10 day forecast.

  • Southwest: Brandon – A hot and dry week with no rain activity. Although the crop is generally in good condition another rain would benefit the crops.
  • Northwest: Dauphin – This area is still in good condition however there has been some crop damage due to hail and strong winds. Some isolated showers have helped some of the crop to fill the pods.
  • Eastern: Winnipeg south – This area remains the driest region of the province, rain is needed to finish the crop. No rain is in the forecast for this week, the next rain event appears to be early the week of the 23rd.

 

UNITED STATES

North Dakota

There has been scattered showers in the central and eastern part of the state. The crop is still variable with areas prospering and others suffering from excessive hot dry weather. Quality results will be variable with the anticipation that the high temperatures will produce high protein barley. Sidney, which is on the ND/Montana border, should start combining this weekend.

Idaho

In general the crops are looking good. There is starting to be a fair amount of lodging due to heavy foliage. For Charles, the winter barley, results have been poor, both low test weights and yields. The stands were too heavy and the crop does not finish well when the stand is heavy. The forecast for the next week is for very hot and dry weather. As mentioned previously the crop is in many stages which will translate into a longer barley harvest.

Montana

The irrigated crop is looking good and there remains excess water for additional irrigation of the barley crop. The dry land has lost a little of its crop rating due to hot dry weather. Top soil rating has just dipped below 80%. Like all areas, the dry land barley will require some moisture within the next two weeks.

--  Contributed by Pat Rowan

WESTERN CANADA BARLEY SEEDING UPDATE

10/05/2018

Western Canada

Finally general seeding is occurring throughout Western Canada. The weather forecast is for hot, dry weather with little rain events to interrupt seeding. Day time temperatures are forecast at 20C or higher however overnight temperatures are in the low single digits which is below normal for this time of year.

Southern Alberta is roughly 10 days behind normal seeding progress with this area approximately 25% seeded, just slightly behind the 5-year average of 35% for May 8th. Soil moisture is 65% “good” and some rain is forecast for later this week which would benefit the barley that was seeded in the last 10 days. Central Alberta is less than 10% seeded and northern Alberta just started seeding this past weekend.

General seeding has started throughout Saskatchewan - the southern area is the most advanced with barley, wheat and durum being the first crops seeded.

Manitoba is the most advanced in seeding of the 3 provinces, with the southern section over 60% seeded and most of the Red River Valley expected to be finished seeding by the middle of next week. This past weekend Manitoba was hit with dry winds of up to 75 kilometres per hour, blowing topsoil and producing faster dry down conditions which is negative for crops as the soil was already very moisture deficient.

SE Saskatchewan and Manitoba are in a dry cycle; these areas have received only 40% of normal rainfall in the last 12 months. Drought was dominant over the majority of the Prairies in the summer of 2017 with the exception of Northern Alberta and NE Saskatchewan. Recent trends across the West have seen more limited rainfall and warmer than usual temperatures than historical averages which have allowed topsoil and subsoil moistures to trend much drier. This year’s dry conditions are very worrisome going into spring seeding. The majority of the Prairies will be in need of rain in the next 2 to 3 weeks to give the crops a good start to the growing season and promote good emergence and plant germination.

United States

Idaho is 75% completed seeding, the east and west portions of the state are the most advanced, the northern section is lagging behind.  North Dakota is roughly 25% complete, the SW corner, which is on the Montana/North Dakota border, had good rains this past week. The remainder of the state is dry and it will require a general rain within the next 2-3 weeks. Southern Montana, on irrigated land, is 70% complete and the northern section, which is mostly dry land, is 30% seeded to date.