Australia: Massive shortage of feed barley makes premium for malting quality disappear

The premium for Australian malting barley has vanished as demand for feed barley surges, The Weekly Times reported on March 6.

Feed 1 delivered to Melbourne hit A$275 a tonne last week and remains at that level this week, well above the A$263 a tonne being paid for malt barley.

Jumbuk Ag consultant Colin Peace said that there was a “massive shortage of feed barley”.

“Worldwide there are tight balance sheets and in Australia it’s exacerbated by northern demand for cattle on feed in NSW and Queensland.”

Mr Peace said many growers sold feed barley straight off the header instead of warehousing it due to rising prices.

Emerald chief executive officer David Johnson said the lift was driven by global demand including a one million tonne tender by Saudi Arabia for May shipment.

While the feed grain will be supplied by the European Union, it “tightened” the global feed barley balance sheet, he said.

He said the feed price lifted $US25 a tonne in response.

Mr Johnson said he expected to see more feed barley planted this year as a result of the positive prices.

“There was a reduction in barley planted following the 2016-17 crop, but I would expect to see an increase in acreage in response to the price,” he said.

“I don’t see them (prices) easing off.”

Last month, Emerald loaded a new bulk carrier, Nord Colorado, at the Port of Melbourne, with feed barley destined for China on its maiden voyage.

Mr Johnson said the bulk carrier was loaded with 50,000 tonnes of feed barley and it was the tenth cargo of this size bound for China in 12 months.

He said the demand from China had grown rapidly as it was now the biggest buyer of Australian feed barley.

“It’s driven by pork and poultry consumption,” Mr Johnson said.

Rabobank global grains expert Stefan Vogel said the EU was the biggest producer of barley, growing 60 million tonnes a year with most of it going to feed in the EU or Saudi Arabia.

Mr Vogel said corn and wheat prices were rising leading to more demand for barley as a substitute.

“With wheat prices increasing in the US in the past six or seven weeks, then it’s easy to replace barley in the mix.”

Australian Standard White wheat, delivered to Melbourne, is fetching A$280 a tonne.

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