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.
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.
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
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.
WESTERN CANADA BARLEY SEEDING UPDATE
17/04/2018
Temperatures have been consistently below average in Western Canada this Spring and as a result seeding will likely be delayed 2-3 weeks compared with the average of recent years. Overnight temperatures have continued to fall below zero in many areas of the Prairies, keeping the soil from warming up. A recent low pressure system brought snow to the Western Prairies creating further delays, although more average temperatures are forecast for the balance of the month of April.
At this time last year farmers in southern Alberta had commenced seeding and about 15% of total barley acres had already gone in. This year farmers hope to start seeding by the end of April. The last time that Prairie farmers seeded late was 2013. That year farmers seeded past mid-June, which is not optimal. Some acres were also left unseeded. Under the present conditions, farmers in the northern tier of the Prairies may struggle to seed their crops before June 10, which is the last day that crop insurance is available for this year’s seeded crops. While there is still lots of time to get the crop seeded, the window has been reduced due to the unseasonably cold conditions.
In the US, the same conditions apply to Montana, as in southern Alberta, lots of snow cover and cold temperatures are threatening to impair timely seeding. In North Dakota, the cold temperatures and snow events will push seeding back closer to the end of April or early May. Idaho is the only state that has commenced seeding and they are around15% seeded to date.
The weather has become a talking point in Canada and the market is realizing that farmers will be seeding late. This is a an area of concern that will have to be monitored in coming weeks. Meanwhile a strong feed barley market in Western Canada has resulted in a lot of malting quality barley being sold into the feed sector.
GLOBAL BARLEY MARKET UPDATE
04/12/2017
Global barley production in 2017 is estimated by the USDA at 141.7 million tonnes (mt), down from 147.1 mt in 2016. Output is lower in Australia (8.0 mt compared with 13.4 mt in 2016), Canada (7.3 vs 8.8), the US (3.1 vs 4.4) and Argentina (2.8 vs 3.3). Production is up 3 mt in Russia year over year to a record 20.5 mt.
Australia – The Australian barley crop is estimated at 8.0 mt, down from 13.4 mt last year, a 40% drop as yields fell from record levels in 2016 to below average this year. Rainfall during harvest this year, particularly in eastern Australia, slowed harvest and impacted quality reducing the amount of Malt 1 available. As of the end of November, the harvest was estimated to be 1/3 complete in Victoria compared with over 50% complete in Western Australia. Export values for Malt 1 are indicated at $235-240 FOB WA.
In the EU malting barley supplies are up considerably year over year given the major improvement in the French crop. However quality problems in eastern Europe and in Germany have limited the French export surplus. Price indications for French two-row Spring barley are are ~US $245 FOB Mosel while Danish values are ~$225 FOB.
The U.S. harvested its smallest barley crop on record at 3.1 mt, compared with 4.3 mt last year, a 29% drop, and 4.75 mt in 2015. Large supplies of malting barley left over from a bumper, high quality harvest in 2016 led to fewer contracts by maltsters and brewers in the U.S. this year.
Western Canada, harvested its best malting barley crop since 2013 with selection rates running 65-70%, although strong feed prices are keeping the spread narrow with good quality malting barley moving into the feed sector in some areas. Protein content in the 2017 crop is slightly below trend averaging around 11.5%, lower than expected given the dry start and finish this season. See the Canadian Grain Commission’s Quality of Western Canadian Malting Barley report released December 4th.
The percentage breakdown of area of the 3 major varieties as follows (last year in brackets): CDC Copeland 49% (44.7%); AC Metcalfe 32% (34.2%); AAC Synergy 7.5% (5%). Price indications to producers in the country have dropped significantly since early August, now $4.50-4.75 per bushel while Canadian new crop two-row is indicated at ~US $250 FOB depending on variety.
GLOBAL BARLEY MARKET UPDATE
09/08/2017
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. A quick survey of the trade suggests the breakdown of area of the 3 major varieties as follows (last year in brackets): CDC Copeland 47% (44.7%); AC Metcalfe 34% (34.2%); AAC Synergy 8% (5%). Price indications to producers in the country are around $5.50 per bushel while Canadian new crop two-row is indicated at US $300-310/tonne FOB depending on variety.
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. Price indications for French two-row Spring barley are are US $255-265 FOB Mosel.
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. Price indications for Australian malting barley are US $245-250 FOB.
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.
