CNS Canada — Consistent demand from the craft brewing industry means solid malt barley contract prices for Canadian farmers, which in turn has driven up acres on the year.
Maltster demand has been well met so far this year, one market participant said, but previous years’ weather has caused supplies to fall, propping up spot prices.
Demand from the craft brewing industry is keeping malt barley prices supported at a time when demand for beer in North America and Europe is mostly flat, said Rod Green, manager at Central Ag Marketing Ltd.
Malt barley is increasingly becoming a specialty crop that’s pre-contracted in advance of the required time of movement, he added.
New-crop malt barley prices are being offered between $5.05 and $5.25, according to data from Prairie Ag Hotwire.
“It’s a good return and that’s why you’re seeing barley acres gradually increasing,” Green said.
Barley’s seeded area (including feed) is estimated at about 6.8 million acres this year, compared with 6.5 million the year prior, according to data from Statistics Canada.
“The maltsters are well covered for their needs for the summer,” Green said.
Farmers are closely watching crop conditions, as chitting in the past couple of years has driven spot malt barley prices higher, and caused supply to fall short of demand.
Chitting, or pre-germination, is when barley starts to sprout inside the kernel and dries out.
“The whole essence of the malt barley business is to get as many kernels switched from starch to sugar as possible, but it’s not supposed to happen in the fields,” Green said.
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.