Canada: 2022-23 barley outlook is for sharply lower carry-in stocks and larger production

For 2021-22, the Canadian barley supply and demand situation includes sharply lower carry-in stocks, production and supply, as well as significantly reduced domestic feed consumption and exports, when compared to last year. Carry-out stocks are projected at 0.3 mln tonnes, a record low level, Agriculture and Agri-Food Canada said in their April report.

The Lethbridge feed barley price for 2021-22 is forecast to hit a new high of C$425/t, unchanged from the March projection, but up sharply from the previous record of C$294/t set in 2020-21 and well above the three- and five-year averages. The 2021-22 prices are supported by tight domestic barley supplies, the decline in the availability of other domestic feed grain substitutes, robust demand and stronger prices of other grains. Barley prices though are being tempered by the large quantities of US corn imports into Western Canada since last September, limiting the price increase.

Worldwide, there has been high volatility in barley prices in the major barley exporting countries due to uncertainty related to the situation in Ukraine. According to the International Grains Council (IGC), EU France feed barley FOB price in the recent week was pegged at US$411/t (US$421/t a month ago, US$235/t a year ago). Australian FOB prices for feed barley and malting barley were set at US$344/t (US$321/t, US$225/t) and US$361/t (US$336/t, US$233/t), respectively.

For 2022-23, the Canadian barley outlook is for sharply lower carry-in stocks, a slightly smaller area, better yield, larger production and supply, greater domestic use and exports, higher ending stocks and a lower average price. Total barley supply is projected at 10.95 mln tonnes, 40% higher than 2021-22 and the fourth highest since 2010. This is largely due to a 52% increase in the production forecast, assuming a return to normal weather conditions and trend yields for the 2022 growing season, and average abandonment rates on the Prairies.

Domestic feed use and exports are expected to increase significantly from 2021-22, given the tight domestic supply in 2021-22 rationing demand to very low levels for the year. Carry-out stocks for 2022-23 are projected at 1.0 mln tonnes, increasing sharply from the projection for 2021-22 and well above the previous three and five year averages.

Based on expectations for a recovery in domestic barley supplies and lower US corn prices for 2022-23, the Lethbridge feed barley price for 2022-23 is forecast at C$350/t, up C$10/t from the March figure and considerably lower than the price forecast for 2021-22.

According to the United States Department of Agriculture’s (USDA) Perspective Planting report released on March 31, 2022, US farmers intend to grow more barley in 2022, reflecting the expected increase in acreage in Montana and North Dakota, the two major barley growing states in the US. Pegged at 2.94 million acres, total barley acreage in the US for 2022 is expected to expand by 11% from 2021 and the highest since 2017.

2022 spring barley seeding progress in the world’s major growing countries continues. Total 2022 spring barley area in Ukraine is projected at 1.0 million hectares, according to Ukraine’s agriculture ministry. In Ukraine, spring barley accounts for around 50% of total barley plantings. Ukrainian winter barley posted a 10% decline versus a year ago. 2022 spring sowings in the EU (France) are now finished, and 88% of the winter crop is rated in good or excellent condition (85% last year), according to FranceAgriMer.

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