Quality and protein issues may limit how much of Canada’s barley crop meets malt specifications this year.
Larger production overall, however, will still leave the country with more than enough malt-quality barley to meet the demand — and result in some malt barley ending up in feed channels. Premiums for higher-protein malt barley are possible going forward.
Statistics Canada now forecasts total Canadian barley production of 9.2 million tonnes, which would be well above the eight million grown in 2012 and represents the largest crop since 2009.
Roughly half of the barley crop was seeded to malt varieties, with 60 to 65 per cent of those supplies reaching malt standards, said Darren Smith, managing partner with RMI Analytics in Calgary, as he calculated total malt barley production of about 3.2 million tonnes.
Smith estimated about domestic maltsters would use about one million tonnes, with another million tonnes moving to the export market and the remainder destined for the livestock market.
“We have an abundance of malting quality in Canada this year,” he said, which means a good portion will end up in the feed chain.
While supplies will be sufficient to meet the demand, there are still some major quality issues out there, he said, noting fall rains in parts of Alberta caused degradation and issues with pre-germination in about eight to 10 per cent of the barley crop.
From a protein standpoint, it’s a bit of a “double-edged sword,” said Smith. While some segments of the industry want lower-protein malt barley, “anybody using adjuncts expects higher enzyme levels and higher free amino nitrogen,” both of which are connected to higher protein levels.
Internationally, Canadian malt barley is known as a higher-protein crop, augmenting the lower proteins grown elsewhere.
Smith said malt barley was typically averaging 11 per cent protein this year, but added the export market was looking for barley in the 11.5-12 per cent range.
As a result, “higher-protein barley in Canada will be more sought after, especially on the export side,” he said.
Malt barley prices have dropped significantly over the past few months, making farmers hesitant to sell at current levels.
Smith said premiums could come forward for higher-protein malt barley going forward, which should be filled quickly as farmers will not want to miss out on those opportunities when they arise.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.