The sharp distinction between malt and feed barley is starting to get a little muddy on the Prairies, with a third class of barley expected to create more opportunities for farmers under the new open market.
Traditionally, about 20 per cent of the barley grown in Western Canada in any given year would hit the malt specifications, and everything else would be relegated to the feed market. However, increasing demand for lower-quality malt barley from China and other countries, along with the looming end of the Canadian Wheat Board’s single-desk approach to marketing the crop, should open the door for a new class of barley.
Often referred to as “fair average quality,” this is malt barley that may not meet the top-end specs, but can still be used to make beer.
“It’s always been a black and white scenario, where you either have malt or you have feed,” said barley broker Rod Green of Central Ag Marketing at Airdrie, Alta., noting that the concern over not meeting malt specifications has hurt barley acres.
While malt barley is a profitable cropping option in Western Canada, he noted, feed barley does not pencil out as well. As a result, the possibility of premiums for lower-quality malt barley, that would have gone to feed channels in the past, will allow farmers to have more confidence when seeding.
In order to be sold as “fair average quality” malt barley, the germination still needs to be 95 per cent, but other factors, such as protein levels, are not as important, said Green.
He could not speculate on the potential price opportunities, but said the market for “fair average quality” barley will likely fall somewhere between feed and malt values.
Different companies will have different specs, he said. “If you fall within those specs you’ll get a certain price, and if you fall into the next area you’ll get a certain price, and eventually you’ll get feed.”