E-Malt.com News article: North Dakota barley acreage is expected to be lowest in the last 80 years

USA: The U.S. Department of Agriculture (USDA) is estimating North Dakota barley production to be 1.2 million acres, only three-fourths the size of the 2004 crop and the lowest level in recorded history 80 years ago, The Associated Press commented on April 21.

The low barley acreage is attributed not only to the competition from other crops. “Malting and brewing companies, with a flush supply of grain, are not offering contracts as lucrative as those farmers landed in 2003 following a crop that was the smallest in six decades,” analysts said.

For the 2003 crop year, contract prices were as high as $3.50 per bushel, farmers said. This year, they are as low as $2.25.

Steve Edwardson, administrator of the North Dakota Barley Council, said there is reason for optimism amid the gloom, as a smaller crop should cut into supply and boost prices. "There's an old term amongst grain merchants that low prices are typically the cure for low prices," he said.

The industry also expects demand in Asia, Eastern Europe, Russia and Latin America to increase considerably in the coming years. Edwardson said that as personal incomes rise in those areas, beer consumption also is expected to increase.

Australia and Canada, two of the United States' main competitors in the world market, both have been hurt by damaged crops, he said.

North Dakota has led the nation in barley production for years. Nationwide, barley acreage is expected to fall by 12 percent to 3.97 million acres. With the size of the nationwide crop projected to drop 12 % from a year ago, the chances of North Dakota losing its top ranking "would be slim," Edwardson said.


24 April, 2005