USA, ND & MN: Barley has transitioned from a commodity crop to a specialty crop

Barley used to be a big deal in North Dakota and northwest Minnesota. From the perspective of overall US production, it still is, Agweek.com reported on January 13.

But the crop has taken on a new role in the region, a commodity group leader said.

“Barley has transitioned from a commodity crop to a specialty crop,” said Steve Edwardson, executive administrator of the North Dakota Barley Council.

Edwardson spoke on January 8 at the annual Lake Region Extension Service Roundup in Devils Lake, ND. The two-day event, which began on January 7, drew about 700 people. Speakers, primarily from the extension service, commodity groups and private companies, addressed a wide range of topics, including barley.

Once, barley was widely grown in the Upper Midwest. But corn production has moved north and west from the Corn Belt, causing some North Dakota farmers to raise less barley or to quit growing it altogether, Edwardson said.

Barley growers “affectionately refer” to corn “as an invasive species,” he said.

Because of competition from corn and other crops, U.S. barley acreage has fallen by an average of 312,000 acres per year since 1987, Edwardson said.

The reduction in acres had led production and exports of feed barley, which is fed to livestock, to plummet.

Remaining barley production is focused on higher-paying malt, which is used for beer. In North Dakota, 90.3 percent of barley production is malt varieties, with only 9.7 percent coming from feed varieties.

Now, U.S. barley production is concentrated in North Dakota, Montana and Idaho, with a presence in northwest Minnesota, too, Edwardson said.

That’s unlikely to change, he said.

As a commodity crop, barley was raised in large volume and sold on the open market.

As a specialty crop, barley is raised in much smaller quantities, with much of it sold under contracts with the malt and brewing industry.

There will continue to be opportunities for barley on the open market, Edwardson said.

In the future, however, the extent of barley production will be determined largely by malt barley contracting programs, Edwardson said.

Other observations from Edwardson:

• New crop insurance geared specifically for malt barley is expected to be available in 2015.

• Research is under way to compare, statistically, the risk of growing barley and competing crops.

• Some corporate buyers, especially ones outside North Dakota, need to learn more about barley.

• More research is needed to keep barley competitive with improving yield trends in corn and soybeans.

• Canada, another big barley producer, will continue to influence U.S. markets, although it’s difficult to say how big that influence will be.

U.S. barley growers are “guardedly optimistic” about the future, Edwardson said.

Despite the changes, at least one thing remains the same for barley growers in the Upper Midwest, he said.

“Barley producers are still the foundation of the supply chain,” Edwardson said. “We have a very simple saying, ‘No barley, no beer.’”

15 January, 2014