Canada: Barley area, production forecast to increase in 2019-20

For 2018-19, Canadian barley production increased by 6% from 2017-18 to 8.4 million tonnes due to higher harvested area, despite a lower yield, Agriculture and Agri-Food Canada said in their January report.

Production in Western Canada averaged 8.0 mln tonnes, of which 50% was in Alberta, 43% in Saskatchewan, 6% in Manitoba and 1% in British Columbia. Production in Eastern Canada averaged 0.4 mln tonnes of which 41% was in Quebec, 27% in Ontario and 32% in the Maritimes.

Total Canadian supply decreased due to sharply lower carry-in stocks. Total domestic use is forecast to increase on higher feed and industrial use. Exports are forecast to decrease due to lower total supply. Carry-out stocks are forecast to decrease by 20% to 1.0 mln tonnes or near record low levels. The average feed barley price for the crop year is forecast to be about 12% higher than last year.

Similar to feed barley, the quality of the malting barley crop is variable. The extensive summer heat increased the protein content of the crop and lowered the weight of the crop, depending on the date of maturity and area.

The Lethbridge spot feed barley prices to-date have been about 20% higher than last year and Prairie malt prices have been 10-15% higher than last year.

World barley stocks are historically low as nearly all of the world major producers and exporters had smaller crops and, in many cases, quality was also lower than normal. World prices for feed barley have been very strong compared to corn prices. Lower world supplies of malting barley, and especially quality malt, is also pushing these prices higher. In 2018-19, because of reduced supply of quality feed barley, relatively high prices of feed barley and the large amount of maize available worldwide, consuming countries will be looking for corn as the alternative to fodder. The average price of feed barley at Lethbridge for the crop year is expected to be C$255/t, about 12% higher than last year.

For 2019-20, Canada’s barley-seeded area is forecast to be higher than 2018-19 due to high barley prices and low carry-in stocks. Production is forecast to increase by 6% to 8.9 mln tonnes due to the higher area and an average total yield. Despite the lower carry-in stocks, total supply is forecast to increase by 3% to 10.0 mln tonnes. Total domestic use is forecast to increase by 2% due to slightly higher feed use in cattle and hog production. Exports are forecast to increase slightly due to higher domestic supplies and a return to normal trade patterns. With a higher supply, barley carry-out stocks are forecast to increase by 10% to 1.3 mln tonnes but it’s still below the previous five-year averages. The Lethbridge cash feed barley price is forecast to decrease by 12% from 2018-19.

As a preliminary projection, at the end of November, the USDA projects a notable increase in area seeded to barley in the US. Total barley production in North America is expected to increase due to higher production, both in Canada and the US. However, due to the sharply lower carry-in stocks, total supply is forecast to increase only slightly. This implies that carry-out stocks will remain low and prices remain relatively strong, although lower than last year. World barley production, as well as supply, is expected to increase slightly for 2019-20 as some of the world’s major producers, such as the EU and Australia, increase their barley production. Large corn carry-over stocks will provide pressure on coarse grain prices.

29 January, 2019