Barley plantings were off sharply due to wet planting conditions in the main barley producing region, thus causing anxieties over a dwindling supply of malt barley.
Reports on the early barley harvest, indicating poor quality and low yields, have done little to ease those worries, according to Randy Brag from Valley Grain Services in Casselton, N.D.
“We’ve seen cases here in Cass County where yields have been as low as 10 bushels an acre to as high as 100 bushels,” he said. “And then there are cases where the crop has been dug up because it wasn’t worth combining. In the world of barley, this year?s crop is known as a ‘mixed bag’.”
He also noted that there are considerable disease problems in the eastern North Dakota and Minnesota barley crops, with vomitoxin levels as high as nine in North Dakota and an even higher 11 in areas east of the Red River.
Normally, maltsters reject any barley has that has a vomitoxin level higher than 1 to 1.5.
Brag also has a facility in Beulah, and noted that barley quality conditions in that area of the state are better than in the eastern regions. The vomitoxin levels are definitely lower and the yield figures he has heard range from 50 to 75 bushels per acre. But, the total acres in that area were down due to prevented plant.
“Due to the short supply problems, I think the maltsters are going to have to sit back and see how this all develops before making any decisions on what they are going to do as far as what they are going to accept on contract and what they are going to let go,” he said.
Brag claimed the hot period in July was really hard on the barley and it seemed to impact most fields, regardless as to when it was planted. The surplus moisture conditions also have resulted in lower test weights with 41 to 46 pounds the average range.
As a result of the short barley crop this year, the mountain of barley stocks that has been holding prices down for the past two years has eroded away.
Brag predicts the maltsters will be offering some very attractive contracts to win back some of the acres to barley, which have slipped away to other crops over the past few years.
And those contracts should be coming out soon as early as the dates for Big Iron, in fact.
“We are looking at an incredibly small crop for North Dakota, which has always been number one in the nation in barley production,” he said. “As a result the maltsters are going to be real aggressive in getting some acres contracted; they have to. I haven’t seen anything like this in my lifetime.
“Maybe the downward movement of wheat, beans and corn in this market will encourage some people to plant barley.”
On a cash basis, malting barley continues to show strength even though the other grains have trended lower with the recent economic news.
Brag has heard in some cases where local elevators are offering as much as
$7 a bushel for malting barley, which accounts for around a 50-cent bump in the last two weeks. Feed barley, has also shown a slight strengthening over the period with prices about a dime higher at $4.85 to $5.
Brag expects to see good prices for some time to come, both for feed and malting barley, citing good U.S. demand as a reason for prices to remain high.
“The maltsters are going to need barley. That is the message brewing industry wants to get out,” he said. “They need barley acres. The question is what price will it take to get some of those acres back into barley production?”