USA: Malting barley growers still waiting for contract announcements from most US maltsters

With only Anheuser-Busch announcing malting barley contract figures for 2016 so far, that leaves those growers who normally contract with the other maltsters wondering when those contracts will be coming out and at what price they will be offered, Farm and Ranch Guide reported on January 6.

Busch has reduced the acres they are contracting, according to Randy Brag of Valley Grain Milling, and are offering contract prices in the range of $4.80 a bushel.

“That’s a decent number,” Brag said. “I am sure for those who haven’t contracted yet they are getting plenty of calls since producers need to start getting their finances lined up for the next year as far as what they are going to do.”

Part of the reason for the delay in releasing contracts is the fact the maltsters over-contracted acres in 2015 in response to the short crop they had in 2014. However, the 2015 crop turned out to be of good quality and high yielding in most areas, thus resulting in a large supply of high quality malting barley.

There also appears to be a fair amount of barley that is close to the edge of being malting barley quality that has been grown on an open basis, and growers are hesitant about hauling that to market. But those with significant VOM numbers have been busy cleaning out their bins for the feed market as they need money to fund their operation or pay down their bank loans, Brag noted.

Another question on the industry’s mind right now is how many open acres of barley will be planted this coming spring.

“Since barley is a low input crop, how many acres of barley will we see planted just because it is a low cost crop to put in?” Brag asked. “Will the barley acres planted in 2016 hold at last year’s level or will we see a 25 percent decrease in acres?”

At this time most industry analysts would say with the ample supply of malting barley now on hand, those planting non-contract barley will likely have a long wait before having an opportunity to sell their barley at malting prices. However, that could change in a hurry if conditions during the 2016 growing season result in a reduced or low quality crop.

If you don’t count the anxiousness over the upcoming malting contracts, the interest in the barley market has been on the lackluster side.

“From Thanksgiving on the grain markets are on vacation,” Brag said. “The buyers have pretty much what they need and if we do see a boost in the market it’s likely due to weather causing a delay in delivery of the grain and we have had some pretty temperate weather across the nation so far this season.”

The mild winter thus far means a lessening in the demand for feed from the livestock industry and that could also be a negative, especially in the feed barley segment of the market.

Latest cash board prices for barley indicated a price of $2.20 a bushel for feed barley and the same price is quoted for malting barley, since there are no active bidders for open malting barley at this time.

08 January, 2016