BARLEY REACHES 10-YEAR PRICE HIGH
Prices for feed barley have smashed through a 10-year price resistance point as dry conditions persist in the Eastern States.
Strong demand, tight supply, rallying international prices and continued dry weather have forced feed barley prices to more than $300 a tonne.
A whopping $400 a tonne was also recorded in Queensland last week after a $20 a tonne jump spurred on by farmers’ efforts to secure supplies.
Mercado analyst Andrew Whitelaw said feed barley prices had “shot through the roof” in recent months, with the average farmer in WA selling feed barley for $270 to $300 a tonne.
“During the past 10 years, barley has just about reached that $300 mark, but hasn’t quite exceeded it,” he said.
“At the moment it is just pushing above that mark . . . it hasn’t reached that since 2008.”
Feed barley futures have doubled during the past 18 months, after recording an eight-year price low in January last year caused by the bumper 2016-17 crop.
Just how high they can go is up for debate. Mr Whitelaw said in general, grain prices could only go as high as the cost of importing grain from overseas. “Corn is an alternative feed grain and while parts of the United States are dry, corn prices are about $213 a tonne,” he said.
“If there is no resolution between the US and China, that is likely to ensure that Chinese demand comes from Australia. On the west coast, prices will be largely determined by what happens in China.”
CBH marketing and trading general Jason Craig said demand for feed barley remained strong. “Strong oldcrop demand for feed barley is being seen from eastern Australia as the drought continues in Queensland and New South Wales,” he said.
“This combined with limited old-crop barley stocks in WA, as a result of a strong shipping program early in the year to China, is seeing grower values strengthen to $300 per tonne free in store.”
It is forecast 1.6 million hectares will go to barley in WA this year.