Canada: Barley production 2023-24 forecast to drop by 4% versus 2022-23

For 2022-23, Canadian barley supply is forecast at around 10.6 million tonnes (Mt), up sharply from last year’s record low of 7.92 Mt, supporting demand from both domestic and international market, Agriculture and Agri-Food Canada said in their June report.

Total domestic use is forecast at 6.11 Mt, up 30% from last year, on higher feed use. Feed use accounts for over 90% of total domestic use.

Total exports are projected at 3.72 Mt, up 39% from last year.

Carryout stocks are projected at 730 thousand tonnes (Kt), rising sharply from last year’s record low but more than 10% below average.

Regarding Canadian barley exports, Statistics Canada (STC) reported that, for the first nine months (August – April) of the current crop year, total exports reached 3.14 Mt with grain exports at 2.60 Mt and product exports at 0.55 Mt (in grain equivalent). Major international destinations include China (accounting for approximately 70% of total exports), the US (20%), Japan (5%), and Mexico (2%), with the majority of the rest being shipped to Colombia, South Korea, Peru, and some African countries.

The Lethbridge feed barley price reached an all-time high of around $465/tonne (t) in June 2022, then it fell sharply to about C$365/t in August 2022, the first month of the current crop year. After that, it increased sharply to almost C$455/t in November 2022. Since then, the Lethbridge feed barley price has trended lower but remains at a historical high. Over the past month, it declined to a range from C$400/t to C$415/t. For the crop year to-date, the Lethbridge feed barley price averaged around C$417/t, versus C$434/t for the same period a year ago. For the entire crop year, the Lethbridge feed barley average price is forecast at C$410/t, down nearly C$20/t from last year’s record high.

For 2023-24, Canadian producers intend to plant 2.87 million hectares (Mha) of barley, according to STC’s seeding intentions survey for the 2023 growing season. This is only slightly above the 2.85 Mha seeded in 2022-23 and 4% below the previous five-year average. Of the total area, approximately 97% is located in the three Prairie provinces: Alberta (54%), Saskatchewan (37%) and Manitoba (5%). The rest is mainly located in Prince Edward Island, Quebec, Ontario, and British Columbia.

Assuming an average abandonment rate and yield, Canadian barley production for 2023-24 is projected at 9.54 Mt, down 4% from last year.

Supported by an expected increase in carry-in stocks, total supply in 2023-24 is projected at 10.3 Mt, slightly below 2022-23 and the previous five-year average.

Total domestic use is predicted to increase slightly year-over-year (y/y) on larger industrial use while feed use is projected to be relatively stable.

Exports are projected to decline, but still be significantly above average.

Carry-out stocks are projected at 0.8 Mt, up 10% but down 5%, respectively, from 2022-23 and the average.

The 2023-24 Lethbridge average price is projected at C$350/t, lower than the C$410/t predicted for 2022-23, primarily under the pressure from lower 2023-24 US corn prices.

Worldwide, the United States Department of Agriculture (USDA)’s June projections point to a smaller 2023-24 barley crop. This is due to an expected drop in barley production in the world’s major barley exporting countries, led by Australia posting a 29% (4.1 Mt) decline, followed by Russia to decline by 9% (1.9 Mt), despite a 2% increase (1.06 Mt) in the EU and a 4% increase (0.22 Mt) in Ukraine. Global demand for feed barley is projected to soften due to large world corn supplies while industrial demand is expected to remain flat. Ending stocks are projected to decline by 5% y/y to 18.2 Mt, the lowest on record.

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