Lower-quality malt barley still commanding firm prices

CNS Canada — Western Canadian malt barley is still receiving firm bids despite a lack of high-quality supplies, according to industry watchers.

“Prices are still fairly high but quality is fairly low.” said Reid Fenton, president of BLB Grain Group at Three Hills, Alta.

“If it grows, it goes,” is how he described the current situation.

Barley that qualifies for malting specifications is generally receiving bids close to $6 a bushel, he said.

However, because of hailstorms, snow and cold that plagued the Prairies last year, fewer crops actually reached those requirements.

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“That seems to be the issue we’re facing. Lots of stuff did not grow right off the bat and some stuff was high-chit,” said Fenton.

Poor weather took its toll on barley crops in most parts of Alberta, according to a director with the Western Barley Growers Association.

“It was a tough year to produce malt in west-central Alberta,” said Jeff Nielsen, who runs an operation near Olds.

Malt generally does worse in high-moisture situations, he said, as the germ will break away from the kernel too easily. Maltsters have strict specifications for the malt they accept, which usually requires protein content of 11 to 12.5 per cent (dry basis).

“My malt turned out to be higher in protein at 14.2 (per cent), which I’ve never seen before in my barley,” he said.

“Growing demand”

Heavy rains also damaged the malt barley crop south of the border, leading to a further scramble for supplies among maltsters.

When it comes to price for new-crop supplies, Nielsen said values could be a little higher. “I’ve generally heard (bids of) $4.75 and up for new crops.”

However, feed barley has attained prices of $4.10 in some cases, which is almost as high.

“You generally want to see a dollar more for malt than feed,” said Nielsen, pointing out malt barley has more requirements than feed barley to meet proper specifications.

Pricing opportunities are out there for producers, though, Fenton added, as maltsters are knocking on doors looking to secure new production contracts. They’re doing so even though many have their short-term needs covered right through to the end of July.

“We’re seeing a growing demand for actual malt,” Nielsen agreed, noting some craft breweries exclusively use water, yeast, malt and hops in their brews, forsaking rice adjuvants that are becoming more prevalent in bigger-name labels.

“So we’re seeing demand for good-quality malt from them (craft breweries),” he explained.

China is another market developing a taste for good-quality beer, he added, so he’s hoping that will translate into higher exports.

— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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