Canada: 2020-21 barley exports forecast up by 450 tonnes from April

For 2020-21, the forecast for total Canadian barley exports (raw barley grain and grain equivalent of malt) is pegged at 4.2 million tonnes, up by 450 thousand tonnes from the April forecast, based on the ongoing heavy exports of raw barley grain. It is expected to be 38% higher than last year, the highest since 1997-98, Agriculture and Agri-Food Canada said in its May report.

Statistics Canada (STC) reported that exports of raw barley grain for the first eight months (August 2020 – March 2021 period) of the crop year increased by 68%, largely due to strong demand from China, although exports to the US and Japan fell. Exports of barley products decreased by 7%, largely due to lower demand from the US and Japan, although exports to Mexico, South Korea and Colombia increased.

Barley imports for 2020-21 are expected to rise sharply from last year to 270 thousand tonnes, based on the ongoing strong import pace, relative to a year ago.

STC reported imports at 166 thousand tonnes for the August 2020 – March 2021 period, compared to 36 thousand for the same period last year. Imports to all western provinces surged for the same period and Alberta led the increase. Most of the imported barley was shipped from Montana, North Dakota and Maine in the US.

Total domestic use is projected to decrease marginally, mainly due to decreased demand for feed consumption. Carry-out stocks are projected to decline sharply from last crop year to 0.5 mln tonnes, the lowest level on record.

For the crop year to-date, the average feed barley price in Lethbridge sat at C$273/t, underpinned by heavy exports, which has led to the average feed barley price in Lethbridge surging to above C$350/t in Mid-May. Assuming the trend continues for the rest of the crop year, the average price for the entire crop year is expected to be above C$285/t, higher than the record level of C$279/t in 2012-13.

For 2021-22, the planned barley area in Canada is forecast to increase by 14%, or 426 thousand hectares from 2020-21 to almost 3.5 million hectares, according to STC’s March 2021 principal field crop acreage report. Producers in the Prairie provinces decided to plant more barley, while producers in Quebec and Ontario plan to grow less. If accurate, the nationwide barley area would be at its highest point in 12 years. Saskatchewan is expected to lead the growth in barley acreage, increasing by 309 thousand ha to near the intended barley acreage in Alberta. Barley area in Alberta and Manitoba is expected to rise by 116 thousand and 18 thousand ha, respectively. If realized, Saskatchewan, Alberta and Manitoba would have the largest barley area since 2007, 2009 and 2013, respectively.

With projections for harvest area to be up by 13% and yields to be down by 2%, production is forecast to rise by 11%. Supply is forecast to rise by 4.6%, the highest in twelve years, which accordingly will support exports and domestic consumption.

Canadian barley exports are anticipated to remain strong, based on predictions for continued heavy demand from Canada’s major barley importers and ample domestic supply. However, exports are expected to be lower than the previous year, based on the assumptions of expanded feed grain (such as wheat and corn) supplies in the world’s major exporters and an appreciating Canadian currency.

Domestic use is anticipated to increase based on predictions for growth in feed consumption and
industrial use. Carry-out stocks are forecast to rise sharply due to ample supply.

The average price of feed barley for 2021-22 is forecast to decrease, based on the projection for higher 2021-22 supply, compared to lower demand. However, the predicted higher US corn price for 2021-22 is expected to provide support for feed barley price.

The United States Department of Agriculture (USDA) is expecting a slightly smaller 2021 barley area in the US, at 2.59 million acres (Mac), versus 2.62 Mac actually seeded in 2020. There are only minor downward cuts applied to the supply and demand projections for the US barley, when compared with 2020-21.

Worldwide, the USDA projects that the combined area and production for 2021-22 in the world’s
major barley exporters will decline slightly.

Australia’s barley area and production are anticipated to have a significant drop in 2021-22, but will be offset by the expanded area and increased production in other major export countries, such as Ukraine, Argentina, etc. Notably, barley production in Morocco, one of the world major barley importers, is expected to increase to 2.400 mln from 640 thousand tonnes in 2020-21. In total, world barley production for 2021-22 is predicted to drop by 2% from 2020-21 to 153.6 mln tonnes, based on projections for lower harvested area and yield. However, it would still be 5% higher than the previous five-year average, experts believe.

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