Canada: Barley use down 5% in 2016-17, forecast to increase by 3% in 2017-18

For 2016-17, Canada’s total domestic barley use decreased by 5% to 5.831 mln tonnes due to lower feed and industrial use, Agriculture and Agri-Food Canada said in its latest report this month.

Exports increased by 17% to 2.339 mln tonnes as the crop year ended with strong barley grain movement.

Barley carry-out stocks increased to 2.1 million tonnes, 56% higher than the previous five-year average.

The Lethbridge cash feed barley price decreased by nearly 20% to C$169/tonne from 2015-16 due to the higher feed grain supplies, softer US corn prices and world barley prices.

For 2017-18, the nation’s barley-seeded area decreased by 10% from 2016-17 to the new record low of 2.3 million hectares.

Production is forecast to decrease 18% to 7.2 mln tonnes due to the lower area and below average yields.

Despite higher carry-in stocks, lower production will cause total supply to decrease by 8% to 9.4 mln tonnes.

Total domestic use is forecast to increase by 3% to 6.033 mln tonnes due to higher feed and industrial use.

Exports are forecast to decrease by 8% due to lower world barley trade due to high corn and wheat supplies.

Barley carry-out stocks are forecast to decrease by 41% to 1.3 mln tonnes and fall below the previous five-year average, the experts believe.

The Lethbridge in-store feed barley price is forecast to increase due to the tighter total barley supplies, a higher US corn futures price and the decline in other feed grains supplies.

The average Canadian barley yield is estimated to be the lowest in the past three years, down 6% from the previous three-year average. The dry conditions on the western and southern half of the Prairie Provinces brought the overall yield down, especially in Saskatchewan. Barley production was variable in the western provinces with Manitoba having a slightly lower yield than in 2016 but 2017’s yield is still higher than any of the long-term averages. As a result of strong drought conditions, similar to the neighbouring US states of Montana and North Dakota, Saskatchewan had a year-to-year decline in yield and production of 21%. Alberta, Canada’s largest barley producing province, saw its 2017 barley area drop to a record low and this caused production to fall to its lowest level since 2002 which was a bad drought year. Alberta had an all-time record barley yield in 2016 and for 2017 it is 12% lower although the 2017 yield is close the previous five-year average and slightly above the 10- year average. Large area increases in canola and spring wheat were the main reasons for the decline in area seeded to barley in Alberta. Eastern Canada’s barley area and production continues to decline in favour of corn despite good demand and prices for products such as malt barley and milling oats. For Eastern Canada, barley area seeded and production were down about 3% from 2016. However, when compared to the previous 10-year averages, barley has declined 31% and 23%, respectively.

Barley carry-in stocks are 47% higher than the previous crop year and well above the previous three and five-year averages. The commercials are also holding much higher levels of stock and are well over 100% higher than last crop year. Alberta was the main source of the increase in barley farm stocks, in terms of tonnage, holding as much as Manitoba and Saskatchewan combined. Eastern Canada’s barley stocks are small in comparison to the Prairie Provinces as production continues to decline in favour of corn as the feed grain of choice.

Lethbridge barley prices have been relatively flat as it entered the new crop year. The Lethbridge market is essentially in the region of the prairies which has been most affected by dry conditions, i.e. Southern Alberta and Southwestern Saskatchewan. Harvest price pressure will come as the central and northern regions start bringing barley in from less drought affected areas with higher yields. Spot malt barley prices on the Prairies have been 5 to 10% higher than last crop year mirroring a similar increase in world feed and malt prices. Tighter world feed and malt barley supplies have been the main factors in the price increases.

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