GLOBAL BARLEY MARKET UPDATE
NORTH AMERICA – After a cool, wet start to the season in Western Canada, which delayed seeding in some areas, hot and dry conditions this summer have taken a toll on crops, particularly in the southern regions of Saskatchewan and Alberta leading to expectations of below average yields and high protein in cereals including malting barley. The barley harvest has now started in southern Alberta, Saskatchewan and parts of Manitoba, while in more central areas some finishing rains would help to fill crops and replenish soil moisture. Preliminary harvest reports of high protein and thin kernels in barley are not surprising, particularly for the earliest samples.
Barley seeded area in Western Canada is estimated to have dropped 10% from 2016 resulting in expectations for a smaller crop this year. The latest Agriculture and Agri-Food Canada Supply and Demand report from July 18 projects a 15% drop in barley production in Canada down to 7.4 million tonnes (mt) compared with 8.7 mt in 2016.
In the U.S. harvest is underway with the barley crop in North Dakota and Montana having faced similar weather issues as the southern Canadian Prairies. As a result analysts are projecting a significant drop in malting barley output this year compared with last year’s bumper crop. The USDA state survey pegs N Dakota barley yields 18% below last year at 55 bushels/acre (67 in 2016). The USDA is currently forecasting US barley production at 3.1 mt in 2017 compared with 4.3 mt last year and 4.75 mt in 2015.
EUROPE – In the EU the winter barley harvest is now complete while spring barley harvesting is finished in France, however in Germany rains have stalled the last part of the harvest leading to concerns over quality. The spring barley harvest is well under way in the UK with the potential for a healthy malting barley surplus this year, and harvesting has started in Scandinavia although recent rains have slowed progress for the time being.
SOUTHERN HEMISPHERE – In Australia recent rains have benefited crops, rescuing barley in key growing areas from the previous drought conditions and creating hopes for an average barley crop of 8-9 mt. Still, more rain will be needed through the Spring to protect barley yields. The USDA is projecting barley production at 8 mt tonnes compared with 13.4 mt in 2016.
Argentina continues to receive unwanted rain which may have already reduced barley plantings. The USDA is projecting barley output at just 3.0 mt compared with 3.4 mt last year and 5 mt in 2015.