E-Malt.com News article: Canada & USA: Canada not expected to continue importing large quantities of US feed barley

A limited market for feed barley in Canada raised prices and increased corn and barley imports from the US in 2017/18, but conditions are not expected to continue, says USDA.

Dry weather has been one factor influencing the planting of feed grains for Canadian producers as acres are expected to shift to wheat, barley or non-lentil pulses in 2018/19.

Details of grain and feed production in Canada were released by an agricultural specialist with the US Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) last week.

“Prior to March, large crop-growing areas of the prairies received only 40-60% of average winter precipitation,” the specialist reported. “The impact of this shortfall could amplify the effects of below average precipitation carried in from the 2017 growing season, particularly in central Saskatchewan. Achieving average yields for all crops covered in this report would depend on moisture condition improvements.”

There has been additional snowfall in March, but it remains to be seen if that will help recharge the soil moisture conditions, she said. “If the snow melts too quickly, then water will run off the frozen ground, whereas a slow melt would add moisture back to the soil,” she added.

Overall, production of wheat in marketing year 2018/19 is expected to remain similar to production in the marketing year (MY) 2017/18, the specialist said. Corn exports are expected to drop based on global production.

“Tight domestic feed barley supplies have supported increased shipments of corn from the United States,” she said. “However, this is not expected to continue in MY 2018/19, based on a forecast of increased domestic feed barley production.”

Barley production is expected to see an uptick in 2018/19 as low soil moisture levels reduced the amount planted in 2017/18, the specialist said. Production dropped 11% in 2017/18 as acres changed to canola and soybeans.

Barley producers have been slow to sell their crop from the 2017/18 MY into the feed market as much of it reached malting quality, she said.

“Exacerbating these tight supplies of Canadian feed grains, livestock industry demand has grown, with December 2017 cattle-on-feed numbers in Alberta and Saskatchewan reaching five-year highs,” she added.

“Strong Chinese demand for malting and feed barley have buoyed exports of Canada’s high-quality MY 2017/18 crop, more than offsetting an anticipated decline in exports to the United States, Canada’s second-largest market,” she said. “Through February 2018, Canada’s MY 2017/18 barley exports to China were more than double the same-period average for the three previous years.”

Barley exports are anticipated to drop, however, in 2018/19, she said. Imports in 2017/18 are expected to increase past initial USDA forecasts based on the limited amount of feed barley available and the strong import pace already set.

There also continues to be a strong demand for the feed grain from livestock producers, said the specialist. Through February 2018, imports of barley from the US had increased by 36%, but imports are expected to slow in warmer weather.

“In March 2018, tight feed barley supplies drove monthly feed barley prices 13% higher than a year earlier, while ample malt-grade supplies drove down the domestic price premium,” she said. “Since September 2017, feed barley prices have been near malting barley bids in some areas. In MY 2018/19, barley for feeding is expected to increase as feed barley supplies recover.”


23 April, 2018