E-Malt.com News article: US: Barley prices stable over past couple of weeks, some contracts still available for the 2011 malting barley production

Both feed and malting barley prices have remained stable over the past couple weeks and that’s due to a couple of factors, Steve Edwardson, executive administrator for the North Dakota Barley Council, was quoted as saying by Farm & Ranch Guide on May, 9.

The first factor is barley inventories continue to be utilized and, secondly, there are still some contracts available for the 2011 malting barley production.

“The latest USDA report indicates barley stocks in all positions in North Dakota were at 45,890,000 bushels as of March 1. This is down 20 percent from the March 1, 2010 figure,” Edwardson said. “This indicates that carryover stocks are being utilized and decreasing the current inventory is critical to strengthening market prices and stimulating production.”

According to USDA’s end of March Planting Intentions Report, growers in North Dakota intend to plant 690,000 acres of barley this spring, a decrease of 4 percent from the 720,000 acres planted last year and a decrease of 43 percent from the acres planted in 2009. On a nationwide basis, growers are expected to plant 2.95 million acres of barley, which represents a 3 percent increase from acres seeded in 2010.

The planting intention numbers, especially for North Dakota, follow the long term trend for barley acreage, which has been on a steady decline since the mid-1980s, according to Edwardson.

“Barley acreage has been decreasing in the U.S. at an average rate of approximately 312,000 acres per year since 1987,” he said. “If this trend continues, barley could be extinct in the U.S. in 7 to 10 years.”

But he expects the situation to actually get better, based on the following predictions:

– Barley acres are at or near bottom at this time; – The majority of barley acres now and in the future will be focused on malting varieties; – Feed barley acres are likely to be limited and minimized due to the increased expansion of corn; and – Contracting programs will need to be well refined to prevent further erosion of the acreage base.

Edwardson noted that malting barley is becoming a specialty crop, as the malting and brewing industry continues to evolve with flexible contract price offerings, which tend to reflect the movements in the wheat market. Contract prices for 2011 production of malting barley are currently in the area of $6 per bushel.

Many producers still have high quality, malting grade barley in storage that was not raised under contract, he noted. These producers are waiting for price rallies, but marketing production not under contract is difficult due to surplus conditions and sluggish export demands.

However, there is a glimmer of hope in developing new export markets, according to Edwardson.

“The completion of free trade agreements with Columbia and the Latin American region in general is vital to market development,” he said. “Significant opportunities exist to supply malting barley from the Northern Plains to this region. The North Dakota Barley Council continues to provide information services to the brewing industry in Latin America. China also holds opportunity as a market for Northern Plains 6-row barley.”

Exports have been increasing to other regions of the world as well, according to recent figures from the U.S. Grains Council. The Council reported that accumulated exports plus outstanding sales of barley total 100,700 metric tons (4.6 million bushels) or a 6 percent increase over last year. This reflects major successes in moving barley into Morocco and Tunisia, two markets that had purchased no barley from the U.S. last year.

Edwardson reported that spot cash prices for malting barley on April 29 ranged from $5.00 to $5.30 per bushel, which shows modest price strength from January 2011 levels. Feed barley cash prices ranged from $4.50 to $4.85 per bushel.


11 May, 2011