It’s not glamorous, but feed barley is a bright spot

Demand has shot up over the past year but there’s a caveat — China has been the big buyer

Whether to go for malt or for feed is “a question a lot of farmers are asking themselves,” says the markets manager for Alberta Barley.
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Barley growers will have a tough choice this spring: Target an oversaturated malt market or go for the red-hot one — feed barley.

Geoff Backman. photo: Supplied

“It’s got to be a question a lot of farmers are asking themselves, especially if you’re in a region where feed and malt prices have been about the same,” said Geoff Backman, business development and markets manager for Alberta Barley.

“Are these feed prices going to be there at harvest this year, or should we try for malt? And do we think the malt price is going to go up as well? If it isn’t, there’s a real incentive there to put more feed acres in.”

Malt barley prices haven’t moved much over the last two years, and that’s unlikely to change in the immediate future, Backman said in an interview in late March.

“The malt market is putting out a signal that it still has enough supplies of maltable barley, and it’s still able to fill the demand with the prices it’s offering,” he said.

“Until those factors change, it’s difficult to see why it would increase its price.”

But feed barley prices have shot up across the province, with prices in the Peace Country pushing toward the $4.80-a-bushel mark in the past year. It’s the same story in southern Alberta, only more pronounced, with feed prices topping $5 a bushel.

And in some cases, buyers are offering prices for feed barley that have matched — or exceeded — the price for malt barley.

“That’s not all the time, but throughout the year, there have been a few points where we’ve heard this,” said Backman.

That’s not surprising, he added. In the past year, some of Canada’s main barley competitors — including Australia — have suffered from heat and drought, and their exports have started to slip.

“They’re not exporting as much to their normal markets as they typically would, so the demand that would normally be satisfied by Australia is coming into other markets, including Canada,” said Backman.

“The international export market is coming to our door with a price that’s driving up the domestic price as well.”

Some of that demand is from buyers that didn’t buy any Canadian feed barley last year, including the United Arab Emirates, Oman, and Kuwait.

“If they’re coming to us, I think that signals that they’re having trouble getting supplies from their other sources,” said Backman.

But there’s a but

However, the bulk of the increased demand is coming from China, which has roiled Canadian agriculture by slamming the door shut on canola following the detention of Huawei chief financial officer Meng Wanzhou (who faces extradition to the U.S. on fraud charges).

Last crop year, China more than doubled its purchases of Canadian feed barley — to 1.7 million tonnes (from 790,000 tonnes in 2016-17). And in the past four months alone, it has purchased 650,000 tonnes of feed barley, said Backman.

“We’ve seen the world coming to the door for our barley, and hopefully we’ll be able to maintain that market growth.” – Geoff Backman photo: Alberta Barley video

The big question is whether this buying spree will also come to an abrupt halt.

But in the short term, at least, limited supply may top politics, he said.

“At the moment, China has got to be thinking about where it would get barley otherwise. If we have other markets that we don’t generally see buying from us coming to us, it’s difficult to see where China would replace that volume.”

But that could quickly change, he conceded.

“The two things you can never predict in markets are weather and government,” said Backman. “So next year, if Australia is able to produce at its normal levels, the situation may change. Hopefully, China will continue showing up in our market.”

If China does scale back its barley imports, Canadian producers may be able to access other Asian markets, including Japan, which imported 101,500 tonnes in 2017-18 — a significant jump from the 44,600 tonnes imported a year earlier.

“Through the (Trans-Pacific trade deal), we’ve got a better trade relationship with Japan, so we are doing our part to improve market access for barley exports,” said Backman. “We should see continued growth in demand.”

Still, farmers here will have to compete for that increased market share with producers in other barley-growing countries.

“We can expect that there should be more barley acres going in the ground as farmers respond to that signal — but we can also expect that that’s going to be a global trend,” said Backman.

“We can expect farmers in other areas to also follow those signals and look at putting more barley in the ground.”

Even so, Prairie farmers can take advantage of higher feed barley prices by locking in those prices when available.

“There are still some fairly good feed contracts available out there, so if you have access to somebody willing to write you a contract, it’s a safe bet to lock up some of your bushels and take advantage of the situation,” said Backman. “Times are good now, and we’re doing our best to keep exports flowing, but we can’t say what the future will bring.

“We’ve seen the world coming to the door for our barley, and hopefully we’ll be able to maintain that market growth.”

About the author


Jennifer Blair

Jennifer Blair is a Red Deer-based reporter with a post-secondary education in professional writing and nearly 10 years of experience in corporate communications, policy development, and journalism. She's spent half of her career telling stories about an industry she loves for an audience she admires--the farmers who work every day to build a better agriculture industry in Alberta.



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