MarketsFarm — Domestic malt barley is facing pressure from both inside and outside Canada’s borders as demand for both malt and feed barley has increased.
With domestic feed barley prices rising and domestic supplies shrinking with increased exports to China, high-quality malt barley has found its way to feed channels as growers look to sell their crop high.
“Producers have decided to sell their malting barley into the feed sector,” Peter Watts, managing director of the Canadian Malting Barley Technical Centre in Winnipeg, explained.
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“There’s not a lot of incentive for farmers to sell their barley as malt right now. If the end user of malting barley wants to buy 2020-crop malting barley this year, they’re going to have to pay up, but buyers aren’t showing that premium right now.”
According to Prairie Ag Hotwire data from Wednesday, high-delivered bids for malt barley in Manitoba traded at $5 per bushel, compared to $5.25 for feed barley in the same province. Feed barley in Saskatchewan and Alberta was trading as high as $5.50 and $6.64/bu., respectively.
Despite losing the premium malt barley had over its lower-quality counterpart, a trade war between China and Australia, resulting in the former imposing an 80 per cent tariff on Australian barley imports last May, has boosted the demand even higher for Canadian malt varieties.
“We have a good malting barley export program with strong demand in China this year. With the very high prices recently, the demand has tapered off a little bit. China is looking for less expensive options, but there aren’t a lot out there,” Watts said. “Buyers are being scared off right now by the very strong prices.”
He also expects Chinese demand for malting barley to continue, as well as increased demand at home as bars and restaurants reopen.
“I hope farmers will grow malting barley varieties, because the new varieties yield very well and they give them an option for that extra 2.5 million-tonne market for malting barley that they wouldn’t otherwise have if they just grew a feed variety.”
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
