USA: Barley plantings see a large increase in North Dakota’s prime growing region
The good prices offered in last fall's malting barley contracts seemed to have accomplished the goal that the malting industry was shooting for - a large increase of barley acres in 2012. Sun Prairie Grain's Lance Kalmbach, who is stationed at their Bowbells, N.D. facility, indicated barley acres in that region of the state will be more than double last year's amount, Farm & Ranch Guide reported on April, 24.
"Those first contracts were offering in the neighborhood of $7 a bushel to the grower and they filled up pretty early. Later contracts got down in that $6 to $6.25 range when they basically filled up," Kalmbach said. "With more than double the amount of acres, and if the growing seasons turns out alright, we (in North Dakota) should be back to be the top malt barley producer."
But even with this large bump in acreage, and if the yields are good, he doesn't expect supplies to build up to a point where the contracts offered next fall and going to fall off the edge of the table.
"I don't think most of the maltsters have the year to two-year supplies like they had in previous years," he said. "So I think it's going to more of a year-to-year type of deal instead of buying a two- year supply of it and having that on hand. It's going to become more of a hand-to-mouth situation."
Because of the large increase in acres and the potential for a good crop this year, Kalmbach expects the crop will be large enough this year to limit much strength in the open barley markets.
"I don't know too many that are planning on planting barley without a contract and I have been recommending against it," he said.
On the feed barley side, cash prices have been pretty steady and have been following the price of corn for the most part, he noted. Feed barley supplies are also very tight, with very little being shipped out of the region. Instead the limited supply is being absorbed for local use by those using feed barley in the rations or by the pet food industry. The amount of feed barley entering the export channels is also very small.
Kalmbach termed barley exports as real quiet and again last week, the U.S. Grains Council reported no export shipments or sales for feed barley. On the other hand, conditions in other parts of the world may lend support to barley prices later this summer. Currently Britain is experiencing severe drought conditions that are expected to impact malting barley production in that nation. A spokesman for the Brewers Molson Coors has warned that an unusually dry winter and spring is causing problems with the supply of high-quality malted barley and the price of a 'pint' could increase in the near future in British pubs.
The April World Ag Supply and Demand Estimates (WASDE) saw no change from the March report numbers for barley, except the price range expected to be paid to farmers was narrowed by a nickel on each end of the range, from $5.20 to $5.50 in March to $5.25 to $5.45 in April.
Global barley supplies for 2011/12 were lowered 0.6 million tons mostly on lower 2010/11 and 2011/12 production for Iran. As far as barley consumption worldwide, the figures remained nearly constant, with just a small downward adjustment due to lower barley feeding in Saudi Arabia.
Local elevator cash bid prices in the region averaged $4.55 a bushel for feed barley and $5.80 for malting barley.
The plantings of North Dakota's barley, durum, spring wheat and oats crops are well ahead of last year.
The U.S. Department of Agriculture in its weekly crop, livestock and weather report says that barley is 29 percent planted, which is more than a month ahead of last year. And the durum crop advanced 19 percentage points to 35 percent planted, about six weeks ahead of last year.
Spring wheat and oats were 45 and 39 percent planted, respectively, both over a month ahead of last year.
The USDA says that vast areas of North Dakota are in good condition for fieldwork, though some reporters indicated work was slowed by precipitation in localized portions.
25 April, 2012
