Canada: 2022-23 barley supply projected sharply up from last year’s record low

For 2022-23, Canadian barley supply is projected at 10.6 million tonnes (Mt), up sharply from last year’s record low of 7.9 Mt. This is primarily due to the rebound in production compensating for the record low carry-in stocks, Agriculture and Agri-Food Canada said in their January report.

As a result of the recovery in supply, demand for both domestic use and exports are expected to increase significantly from the previous year. Total domestic use is forecast to increase by 25% on higher feed and industrial use. Total exports are expected to increase by 41% due to good domestic supply and lower foreign supply.

Carry-out stocks are projected at 0.9 Mt, rising sharply from last year’s record low and marginally above the previous five-year average.

For the crop year to-date, the Lethbridge feed barley price averaged slightly below C$415/tonne (t), with premiums over Prairie provincial averages at seven-year highs. Currently, the feed barley price in Lethbridge is nearly C$50/t above the Alberta (AB) provincial average, up from last year’s C$40/t and the five-year average of C$30/t prior to 2021-22. Compared to the Saskatchewan provincial average, the premium reaches above C$90/t, up from C$65/t last year and the C$55/t five-year average prior to 2021-22. Compared to the Manitoba (MB) provincial average, the premium reaches C$85/t, up from C$50/t for last year and the five-year average prior to 2021-22. For the entire crop year, the Lethbridge feed barley average price is predicted at C$400/t, down nearly C$30/t from last year’s record high due to expectations for a recovery in domestic feed grain supply. However, it will remain historically high, largely underpinned by strong wheat and corn prices and robust demand.

Worldwide, the combined foreign barley supply in 2022-23 is projected at 187 Mt, based on data from the United States Department of Agriculture (USDA). It is 1% and 2% lower, respectively, than last year and the previous five-year average. This, together with robust demand for animal feed, is expected to lead the 2022-23 foreign ending stocks to drop to 17 Mt, a record low for at least the past two decades.

For 2023-24, Canadian barley area is forecast at 3.0 million hectares (Mha), up 5% from 2022-23 and only marginally higher than the previous five-year average. Good current prices along with robust demand are the major underlying drivers to support the 2023 barley acreage. Acreage in Western Canada is predicted at 2.9 Mha, up 5% from 2022-23. Acreage in Eastern Canada is predicted at 0.1 Mha, up 14% from 2022-23.

Assuming average abandonment and yield potential, Canadian barley production in 2023 is projected at 10.0 Mt, remaining relatively unchanged from the previous year, despite larger acreage.

Total supply in 2023-24 is projected at 10.9 Mt, up 4% and 6% from 2022-23 and the previous five-year average, respectively, mainly reflecting an expected increase in carry-in stocks. Total domestic use is predicted to increase from 2022-23 on larger feed use, which is above the average level given good domestic supply.

Exports are projected to decline, given the outlook for larger global feed grain supplies, but still above the average level.

Carry-out stocks are projected at 1.0 Mt, up 11% from the previous year and a recent six-year high.

The 2023-24 Lethbridge average price is projected at C$360/t, lower than the C$400/t predicted for 2022-23, partly reflecting an anticipated good domestic supply and lower US corn prices in 2023-24.

For the 2023-24 US barley supply and demand situation, the USDA’s 10-year baseline projections released on November 7th, 2022, point to larger supply, unchanged total domestic use, and higher ending stocks. Farm price is projected at US$6.50/bushel, 11% lower than the 2022-23 projection.

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