Australia: 2022/23 barley production forecast at 11.5 mln tonnes, below record marketing year 2021/22

FAS/Canberra forecasts Australia’s marketing year (MY) 2022/23 barley production at 11.5 mln tonnes, 2.2 mln tonnes below the record for MY 2021/22 of 13.7 mln tonnes. The forecast production would still be a large crop, and if realized would be the fourth largest in Australia’s history. The lower production is in small part related to a forecast reduction in planted area, but mainly due to a lower average yield. This yield forecast, however, is still 12 percent above the previous 10-year average yield. A significant positive for MY 2022/23 is that at the start of planting in April 2022 soil moisture across most of the barley cropping areas is very good and rainfall during the early establishment period is forecast at around average or above. However, a key reason for the lower barley yield forecast is that despite strong barley prices, input cost prices have increased markedly over the months preceding planting.

Similar to wheat, barley is typically planted from April to June and harvested from October to December. Those in more northern areas generally have earlier planting and earlier harvest compared to the more temperate climate in the south. As mentioned earlier most of the winter cropping regions have average to above average soil moisture at the start of planting this year. Although there have been variations from region to region, it is essentially the third year in succession of good soil moisture conditions at planting across most of the winter crop producing areas in Australia. This is encouraging another big planted area of barley, forecast at 4.3 mln ha for MY 2022/23, down slightly from 4.35 mln ha in the previous record-busting production year.

FAS/Canberra forecasts the MY 2022/23 yield at 2.67 t/ha, 15 percent below that of the previous record year of 3.15 t/ha but still 12 percent above the previous 10-year average. With the expectation of very good soil moisture conditions across much of the barley producing areas, plus forecasts for rainfall over the April to June 2022 period at an average chance of exceeding median rainfall, the scene is set for the forecast crop to still achieve above average yields. However, as mentioned input use is expected to fall, and expectations are still for a decline from the record average yield for barley achieved in MY 2021/22, which had excellent growing conditions across the barley producing regions.

FAS/Canberra’s barley consumption forecast for MY 2022/23 is 5.5 mln tonnes, the same as MY 2021/22. Domestic consumption for malting purposes, which includes malt for export, is relatively stable with livestock feed consumption being the primary variant from year to year. Malt exports are typically around 700,000 MT a year to Southeast Asian and East Asian markets.
Australia’s barley exports for MY 2022/23 are estimated at 6 mln tonnes, 3 mln tonnes below the estimate for MY 2021/22 of 9 mln tonnes. Although this is a large drop it would still be at a 10-year average level of exports. This reduction is driven by the forecast 2.2 mln tonnes drop in barley production while domestic consumption is forecast to remain stable. Global demand for Australian barley, however, is expected to remain strong.

Barley is not traded in high volumes on the world export market and there are only six nations that consistently export any significant volumes. Ukraine is a significant exporter at around 15 percent of world barley trade. With significant disruption to production, transport and port logistics due to the Russian invasion of Ukraine, the reduced supply is expected to have a significant bearing on world trade in the forecast MY 2022/23 and the current MY 2021/22.

Australia over the last five years has been the second largest exporter of barley behind the European Union and ranges from 10 to 30 percent of world trade mainly due to the large variance in production caused by drought-impacted years. In MY 2021/22, FAS/Canberra estimates exports to reach a record of 9 mln tonnes, in part due to supply disruptions in other key suppliers like Ukraine.

Early season barley exports in MY 2021/22 have started extremely strong, reaching 3.2 mln tonnes between November and February and slightly above the 3.1 mln tonnes for the same period the previous year – which achieved full year exports of 8.3 mln tonnes. Similar to wheat, there is an expectation that the export seasonality for barley will have a stronger tail due to the current port capacity constraints, enabling the MY 2021/22 estimate of 9 mln tonnes to be reached.

During the three years from MY 2017/18 to MY 2019/20 exports to China, Japan and Thailand accounted for over 85 percent of overall barley exports. After the impact of China imposing a duty on Australian barley imports there was a big shift in Australian barley export destinations in MY 2020/21. Saudi Arabia became the main destination and along with Japan, Thailand and Vietnam, and these four nations accounted for 72 percent of overall exports. So far for MY 2021/22, however, these four nations have accounted for only 55 percent of overall barley exports.

Importantly for Australia there have been other nations that have stepped up their imports of barley from Australia, notably Philippines and Jordan, and to a lesser extent Kuwait and Mexico. However, Saudi Arabia and Thailand have significantly reduced their imports for the first four months of MY 2021/22, although Saudi Arabia remains by far the largest export destination accounting for 36 percent.

Australia’s ending stocks of barley in MY 2022/23 are expected to remain low at 1.2 mln tonnes as a result of the anticipated continued strong world demand for barley. The forecast 2.2 mln tonnes reduction in barley production and reduced supply available for the export market will also contribute to maintaining low ending stocks in the forecast year.

E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .