Alta. barley market prospects

Barley prices have been slipping lower during this crop year.

“The seasonal pattern of barley prices implies that there should have been a price recovery following harvest, but that has not been the case,” says Neil Blue, provincial crops market analyst with the Alberta government.

Since May 2020, Canada had been able to take advantage of an 80.5% tariff barrier that China had placed on Australian barley imports. This ramped up barley exports significantly in 2020. The 2022 pull-back in barley exports resulted from the reduced supply due to the 2021 drought.

The tariff on Australian barley exports to China was dropped in August 2023, and Australian exports to China have resumed, outcompeting Canadian-sourced barley to that market. Canadian bulk barley exports this crop year to mid-January, as reported by the Canadian Grain Commission, are running near half of last year’s pace.

“During the period of strong barley exports, particularly to China, barley prices rose to record-high levels, supported by the combination of export and domestic demand. Faced with record-high feeding costs, feed users were forced by economics to seek and use alternative feedgrains, including wheat, oats, rye and corn. The logistics of importing corn, mainly by rail from the U.S., became well developed.”

The combination of contracted purchases of corn into the major cattle feeding area of southern Alberta and the reduction of export demand for feed barley has led to the drop in feed (and malt) barley prices during this crop year. Figure 3 shows the rise and recent erosion of barley prices, which are now approaching the 10-year average price of $270/tonne.

“Although some barley export demand has continued, particularly for malting barley, the outlook for barley prices is flat near these current price levels into spring, when northern hemisphere weather concerns may provide support for crop prices in general,” says Blue.