USA: Demand move up the malting barley market

Some of the new markets for the region's malting barley and indications from the maltsters for higher contract prices in 2006 have nudged malting barley prices forward at local elevators. However, the huge corn crop and carryover supplies of barley that didn't make malting grade, prevented feed prices from advancing, according to the report from Farm and Ranch of December 22.

“Today we do have a $2.80 price for malting barley market delivered to Minneapolis and a $2.50 bid delivered to Spiritwood, (N.D.) so that isn't all bad,” according to Randy Brag, barley purchaser for Valley Grain in Casselton. “So there are some bright spots here and the bids are coming up. It appears that Cargill in Spiritwood has picked up some business, and there is a maltster on the West Coast who wants some Midwest barley. So there are some things happening here that have the market a little stronger right now.”

Nevertheless, Brag mentioned the malting barley deferred bids for around 60 days out are down slightly, and he feels part of this is due to the fact that very little grain has been hauled from the farms in southeastern North Dakota since Thanksgiving because of the ice covered roads.

“The market knows there is a lot of barley out there,” he said, “and overall, the malting prices should creep up. But feed barley, with the big corn crop yet that we have to deal with, is steady. We may see some spurts here and there, but I see feed barley starting pretty flat.”

Looking to next year, Brag looks for a continued trend in less barley planted in 2006, with a lot depending on location. Those farmers near a malting plant will realize a higher price because of less shipping costs, while those located a large distance from a malting plant will see their bottom line eaten up by freight charges.

Most of the malting barley contracts being discussed at grower meetings have prices in the $2.80 per bushel range, according to Brag, while most growers he has talked to were hoping the price would be closer to $3. Before deciding on whether the contract being offered is good for the individual producer, Brag encourages each grower to pencil things out, considering such things as costs for fertilizer, fuel, cash rent charges and distance from the receiving terminal.

The area farmers will notice a shift in demand for barley next year as well, according to Brag. Froedtert Malt/International Malting Company recently opened a new malting facility in Montana and decided to close a plant in Chicago. In addition, a malting barley terminal in Minneapolis known as “Malt One” is closing.

The loss of these two facilities means less marketing opportunities for farmers in the eastern region, but the new Montana plant opens up a new chance for malting barley producers in the western areas.The USDA Feed Outlook for December lowered barley imports by 5 million bushels from last month's figure, claiming the slow pace of imports to date was the cause of the decline. Meanwhile barley exports were increased by 5 million bushels to 30 million bushels this month, because of the strong pace of sales to date.

Barley exports in the last marketing year totaled 23 million bushels. The USDA also raised the expected prices farmers will receive this marketing year by a nickel from last month, with prices now forecast to range between $2.35 to $2.55 a bushel.In checking local elevator prices on smallgrains.org, malting barley prices were steady to up a dime or nickel, with one elevator reporting a 13-cent increase. Prices ranged from $2 to $2.33 a bushel. Prices for feed barley on the elevator boards were in a range of $1.24 to $1.45 a bushel, which represented prices that were steady to down a nickel from the last period.

E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .