Canada: 2022-23 barley supplies projected sharply up from last year’s record low

For 2022-23, Canadian barley supplies are projected at 10.6 million tonnes (Mt), up sharply from last year’s record low of 7.9 Mt. This is primarily due to a rebound in production compensating for record low carry-in stocks. As a result of the recovery in supply, demand for both domestic use and exports are expected to increase significantly from last year, Agriculture and Agri-Food Canada said in their late February report.

Total domestic use is forecast at 6.0 Mt, up 28% from last year on higher feed and industrial use.

Total exports are projected at 3.7 Mt, up 37% from last year due to good domestic supply and a decrease in production for the worlds’ major barley exporting countries.

Carry-out stocks are projected at 0.9 Mt, rising sharply from last year’s record low and marginally above the previous five-year average.

According to the stocks report published by Statistics Canada (STC) on February 7, 2023, barley stocks on December 31, 2022 were pegged at 5.1 Mt, up 61% from a year ago, as a result of a recovery in production after last year’s drought.

Nevertheless, it remains 12% lower than the prior 2021 five-year average, as the 2021 drought-induced production decline is expected to have a continued impact on this year’s barley stocks. Of total stocks, approximately 93% were stored on-farm and 7% in commercial positions. On-farm stocks were pegged at 4.7 Mt, up 67% from a year ago. Commercial stocks were pegged at 378 thousand tonnes (Kt), up only 9% from a year ago.

Total domestic disappearance, of which more than 90% is for animal feed, for the August – December 2022 period was estimated at 3.6 Mt, up 25% from a year ago and on par with the prior 2021 five-year average.

Exports of barley grain for the same period sit at 1.6 Mt, up 10% from a year ago and the highest back to at least 2000-01. The export pace was strong in October and November 2022 but slowed down in December. For the current crop year, China is by far the largest destination for Canadian barley grain exports, taking 88% of the exported volume, followed by the US at 10%. Exports of barley products for the same period sit at 283 Kt, down slightly from a year ago and the average. Of the product exports, about 52% were shipped to the US, 27% to Japan and 11% to Mexico.

For the crop year to-date, the Lethbridge feed barley price averaged around C$415/tonne (t). There was a downward trend seen in the Lethbridge feed barley price over the past month. For the entire crop year, the Lethbridge feed barley average price is predicted at C$400/t, down nearly C$30/t from last year’s record high due to expectations for a recovery in domestic feed grain supply. However, it will remain historically high, largely underpinned by strong wheat and corn prices, and robust demand.

For 2023-24, Canadian barley area is forecast at 3.0 million hectares (Mha), up 5% from 2022-23 and only marginally higher than the previous five-year average. Assuming average abandonment and yield potential,

Canadian barley production in 2023 is projected at 10.0 Mt, remaining relatively unchanged from the previous year, despite larger acreage.

Supported by expected increase in carry-in stocks, total supply in 2023-24 is projected at 10.9 Mt, up 3% and 6%, respectively, from 2022-23 and the previous five-year average. Total domestic use is predicted to increase from 2022-23 on larger feed use, which is above the average level given good domestic supply.

Exports are projected to decline, given the outlook for larger global feed grain supplies, but still above the average level.

Carry-out stocks are projected at 1.0 Mt, up 11% from the previous year and a recent six-year high.

The 2023-24 Lethbridge average price is projected at C$360/t, lower than the C$400/t predicted for 2022-23, partly reflecting an anticipated good domestic supply and lower US corn prices in 2023-24.

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