Canada: Weather concerns and weak prices keeping producers from planting more malting barley
Concerns about weather dictating the quality of malt barley is keeping Canadian producers from seeding the crop this year, one industry participant says, while weak prices offer no extra incentive, Grainews reported on April 18.
Acres are definitely going to be down, because of the fear of getting feed barley, which is horrendously low-priced, said Rod Green of Central Ag Marketing at Airdrie, Alta.
Statistics Canada is set to release its acreage estimates for principal field crops on April 21.
Average trade estimates collected by CNS Canada ahead of that report range from 4.4 million to 6.4 million acres.
That compares with the 6.4 million acres seeded in 2016-17, according to Statistics Canada. Those figures account for all types of barley grown.
Rain in Western Canada last fall led to an overabundance of feed grade grains, lowering quality of barley and pushing up supplies, which means weaker prices.
Prices for malt are low as well, further dissuading producers from growing it this year.
Canadas crop is bigger than the country needs, while heavy production in competing growing regions cuts into export demand, Green said.
Australia grew a massive crop in 2016-17 and is exporting heavily to China, with estimates saying sales of all types of barley could double last years exports.
That cuts into the amount China is buying from Canada. So consequently theres a lot of malt barley on the farm, Green said.
The U.S. has had two big crops back-to-back, he added, with prices below Canadian values, which further cuts into demand.
Its a combination of an abundance of supplies and lower world prices, and thats pushing our domestic prices down, he said.
However, the craft brewing industry is providing a small, but strong spot in the Canadian malt barley market.
Thats a steadily expanding market, thats the positive news in the malt business, Green said.
Spot prices for malt barley in Western Canada are between C$3.50 and C$5.10 per bushel, while new-crop bids are between C$4.80 and C$5.10, according to data from Prairie Ag Hotwire.
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