Canada: Supply expected to meet pent-up malt barley demand

This might be the year when the malt barley industry returns to a semblance of normalcy, says an industry official.

“There should be good demand off the combine because the pipeline is empty,” said Kevin Sich, supply chain director with Rahr Malting Co.

Demand has been “beat up” the past couple of years with COVID restrictions on restaurants and bars.

Maltsters are finally at a point where they can start building inventory because brewers are feeling more comfortable about beer sales.

Supply of malt barley in Western Canada should be much improved as well if the weather holds out. Sich estimates that crop yields will be average to above-average in Alberta and Saskatchewan based on current conditions.

MarketsFarm analyst Bruce Burnett agrees that prospects are looking good as of the beginning of August. He is optimistic about quality characteristics such as protein levels and seed plumpness.

However, he said the quality of the barley crop is often determined by harvest weather. Rain in late August or early September could change the outlook dramatically.

Sich is even more concerned about another possible weather glitch caused by the lateness of the crop.

“Frost would be the ultimate disaster because then you have a bunch of barley that doesn’t have the germination, so we wouldn’t be able to use it,” he said.

Burnett said the quality of Europe’s winter barley has been good, but he is concerned about the spring crop because of hot and dry conditions in countries such as Spain.

“Some of that crop, which is used exclusively for malt, is going to run into some quality issues,” he said.

There could be quantity issues as well, according to a satellite-based vegetation index produced by the U.S. Foreign Agricultural Service. The index for the 2022 crop is well below normal in the primary production regions of the EU.

Sich said the global supply picture is a “crazy one” this year because of the war in Ukraine and sanctions against Russia, which are two big barley exporters.

“I don’t see a lot of competition,” he said.

“Anything that we’re willing to export this year is going to move.”

Australia is shaping up to have another good barley crop, which will be available around Christmas time to help fill in any supply gap.

The start of the winter cropping seasons was “very favourable” in most regions of the country, according to the June 2022 version of the Australian Crop Report.

Barley production is forecast to reach 10.9 million tonnes, the fourth largest crop on record.

Australian barley continues to face a stiff 80.5 percent tariff into the Chinese market. Australia has filed a complaint with the World Trade Organization about China’s anti-dumping and countervailing duties.

A WTO dispute panel has been established and is expected to issue its final report by the end of 2022.

Tags: harvest, weather, Canada, Outlook, yields, crop, malt barley, demand, estimates, winter barley