On a global basis, barley appears to be bucking the trend in global grain markets this year of output rises, with output down by 5% in 2014/15 compared with a year earlier, according to HGCA Analyst, Brenda Mullan.
In fact, Mullan said considering recent developments, it is unlikely that we will be talking about a record global crop any time soon, as barley appears to be struggling to compete for area with other bigger-yielding crops.
She says while the current USDA long term forecasts up to 2024 predict a steady incline for barley production, it is still not expected to reach the levels of output that we saw in 2008/09.
“It’s hard to talk about barley production on a global scene without mentioning Canada,” she said, “with the planted area down 2.9Mha in the last 18 years, in favour of other grains and, particularly, oilseeds.”
According to Mullan the EU could currently be described as the powerhouse of barley production, and appears to be the ‘go to’ origin for malting barley exports at present.
She said the competitiveness of EU malting barley has been strong this season so far and this has been compounded recently by the weakening of the euro, compared with the US dollar.
This has led to the EU becoming extremely competitive in third country exports for both barley and wheat, she said.
“Almost 200Kt of barley export licenses were granted in the week ending January 14, to a cumulative (July 1, 2014 – January 14, 2015) total of 4.5Mt, compared with 4.8Mt in 2014.”
Mullan said as a result of the strong demand for EU barley, malting barley export prices have received a level of support throughout the last three to four months.
In the US, Mullan said that the malting barley crop is undergoing somewhat of a dilemma, with the Western US crop linked with bad quality, which has been reported as the worst year ever for US malting production.
“Widespread rains during August, especially for the key malting barley growing regions of Montana and Idaho, led to prematurely germinating grains, which pose a risk as to the reliability of the crop for malting.”
According to Mullan these issues, as well as documented difficulties with the barley crop in competitive exporter Australia, further accentuate the opportunity for other producing countries to supply malting barley to the international markets this year.