USA: Increasing feed barley prices narrow gap with malting prices

The small advancement in feed barley prices over the past two weeks has narrowed the spread with malting barley prices, although, according to Larry Raap, grain merchandiser from Sun Prairie Grain in Minot, N.D., the malting industry is contributing to the strengthening feed barley prices, Farm & Ranch Guide published March 26.

“The maltsters are still out there buying up some of the lower quality barley and that just takes away from the usual feed supply,” Raap said. “So there isn't a lot of feed barley available and we then we have corn helping us out there too. Although the feed barley prices have remained firm even with the slight decline in corn prices lately, the bids for feed barley have been unchanged in the last few days.”

Raap doesn't expect corn fever to sweep through the farming community in the Minot area like it's predicted to do in other parts of the state. In fact, he expects barley acreage will hold its own or perhaps even increase a little in his region of the state.

“There will be more farmers planting corn, but most of them will be putting in only 40 to 80 acres as a way of building up a base,” he said. “I don't expect large individual increases like there will be in the eastern part of the state. Everybody will probably plant some corn, but it will be small acreages.

“In addition, the higher fertilizer prices may keep some of the corn acreage down, since corn uses a lot of fertilizer, while crops such as barley can get by with a lot less,” he continued.

“We contracted just as many acres of malting barley this year for Ruhr Malt as we did last year, which is as much as they would allow us. The average price in his area was in the neighborhood of $3.20 to $3.25, but I have heard of some contracts being offered that were as high as $3.40 a bushel in other parts of the region.”

There is still some barley in the country to move, with Raap indicating they are taking in a little barley every day. That flow will probably dry up when farmers begin spring fieldwork.

The March 2007 USDA's World Agricultural Supply and Demand Estimates is predicting tighter barley supplies and raised the projected barley farm price by 10 cents on the bottom end to $2.85 to $2.95 a bushel. They attributed this increase in price to the strong feed barley prices already in place.

The agency is expecting farmers in the U.S. to plant 3.5 million acres of barley this year compared to 3.9 million acres last year and to harvest 3.0 million acres in 2007, opposed to 3.3 million in 2006. Ending stocks are expected to fall from 108 million bushels to 73 million bushels at the end of the 2007 marketing year.

A check of local elevator board prices on the website smallgrains.org indicated no change in malting barley prices at any of the locations, while feed prices were steady to a nickel to 15 cents higher at some elevators, thereby narrowing the spread between feed and malting barley prices.

Prices for feed barley was listed in a range from $2.90 to $3.25 a bushel, while malting prices were in a 30-cent spread from $3.30 to $3.60 a bushel. The difference between malting and feed barley board prices ranged from 35 to 40 cents a bushel.

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