From the American Malting Barley Assoc. production report…
Production is estimated at 155 million bushels, down 8 percent from the August forecast and 14 percent below 2010, and the lowest since 1936. Average yield per acre, at 69.2 bushels, is down 3.9 bushels from the previous year. Producers seeded 2.56 million acres in 2011, down 11 percent from last year. This is the lowest planted acreage on record. Harvested area, at 2.24 million acres, is down 9 percent from 2010, and the lowest level since 1881. Seeded area in North Dakota establishes a record low for the State, while harvested area is the lowest since 1901. In addition, Michigan, Minnesota, Oregon, South Dakota, and Utah producers set new record lows for seeded acreage, while producers in New York seeded a record-tying low. Record lows for harvested area were set in Michigan and Wisconsin. A record high yield was set in North Carolina, while producers in Arizona reported a record-tying yield.
I don’t dispute that the crop will be low. Michigan’s share of the barley crop is about as big as it has for the hop crop. Which translates to not much.
You’d think with the rise in craft brewing that there would be more demand for barley, but I understand subsidies on other crops has caused other traditional uses of barley to substitute for other ingredients.
I have also read that feed barley is going away, as more of that is going to corn. The malting barley planted is contracted by the maltsters. Don’t know if there is enough cushion for a bad growing year. What is the international crop looking like?
That’s a good point - is the decline in barley going to effect brewers. Making numbers up, but if brewers use 50% of the barley crop and that increases buy 5% but other uses such as feed decrease by 15% due to a lack of demand, then over all crop would decrease but the brewers shouldn’t be effected. (not sure if that is the actual case or not)
To a certain extent the market a farmer sells into involves crop quality. If your quality is low, it goes into the feed market and you get less for it. Malting companies will only purchased the highest quality grain so even a good yield may lead to a short market in top grade barley in a year with bad growing conditions. Commodities markets are scary places to do business.
Besides corn, Canola has also been taking over acres that used to be planted to barley. Canola is the current king in the “not as bad for you as lard” oil market. There is a high demand for it and since it was developed in Canada the barley growing regions are perfectly suited to it. The industry is also developing more heat resistant strains of Canola and it is starting to push out wheat acres out further south.
Like everything else right now, I wouldn’t look for prices of barley to go down anytime soon. Just hope for smaller increases.
Sounds like a determined effort to jack up prices. Similar to hops a few years ago. Only on hops the prices needed to come up. Barley is already super expensive and has been rising steadily for years.
Speaking from an ag supplier side, the higher prices are required to stay in business. Diesel, fertilizer, chemicals, equipment, labor, and other imputs are up. The growers don’t set the price, it’s supply and demand (except when Big Brother steps in).
By the way, I believe that a little less than half the total barley ends up in malt products
The growers aren’t in business to lose money (not on purpose anyway). If a crop isn’t likely to turn a profit, it’s kind of hard to justify growing, isn’t it? I believe that contract production is the way it will go. Most barley growing areas are outside the corn belt meaning their growing season is too short.
On subsidies, most farmers that I know wish the government would stay to heck out of agriculture period. But they want to control, as best they can, food production. More voters eat food than grow it.
If our government weren’t so annal in their petrolium policies, the input costs would go down significantly.
I wonder what the organic barley market is doing? How it compares to conventional. There is alot of added value in organic crops as they can be sold at a premium and require alot less inputs.