E-Malt.com News article: 4255

Canada: Canadian maltsters and brewers are finding it hard to compete for Canada’s barley, as China's thirst for the grain surges, industry lobbyists said on Thursday, February 17, according to Reuters. Barley is one of Canada's largest crops. Local buyers want to find ways to get a more consistent supply of barley from the Canadian Wheat Board, which has a monopoly on the crop, lobbyists told a conference of barley and wheat farm groups that are staunch opponents of the marketing agency.

"Right now, our reputation around the world is not very good," said Phil de Kemp, president of the Malting Industry Association of Canada, which represents the country's C$800 million malting business. Three years of weather problems combined with a move to fewer, larger grain handling facilities have made it hard for the maltsters to get consistent quality, de Kemp said. "The malting industry right now receives average quality at best versus the top quality we saw in the earlier years," de Kemp said.

Canadian maltsters will buy an estimated 1.02 million tonnes of Canada's total supplies of 1.72 million tonnes of malting barley in the 2004-05 marketing year, which runs from August to July, according to wheat board figures. But in recent years maltsters in China have emerged as a big buyers, gobbling up 76 %, or 535 million tonnes, of Canada's exports from 460 million tonnes in 2003-2004, the wheat board said.

Canada is the world's third-largest malting barley exporter, after Australia and Europe. Farmers don't receive enough incentives and signals to reflect the demand from Canadian maltsters, de Kemp said. Beer companies also want to make sure farmers get better prices from the wheat board so they are assured of supplies, said Luke Harford, director of economics for the Brewers Association of Canada. "When we go to the Canadian Wheat Board, they say, 'You're not our customer,"' Harford told farmers.

The Canadian Wheat Board has had good discussions with brewers in recent years, said Bob Cuthbert, the board's senior marketing manager, although he noted the agency contracts with maltsters, who in turn sell malt to the brewers. The agency has worked to improve payment programs and price signals for malting barley, Cuthbert said.

But he said the malting industry is facing new competition from plants in Europe, Russia and the United States and declining beer consumption in Japan. "It's really a success story, but they're under a lot of pressure," Cuthbert said.

He said the wheat board gives domestic players competitive prices, and noted the newly merged Molson Coors Brewing Co. recently announced it would shut a plant in Memphis in favor of production in Canada. "That kind of counters any argument that (Canadian brewers) are not getting a fair price," Cuthbert said.


19 February, 2005