USA: Issuance of malting barley contracts on the barley market
The main driving force in the barley markets at this time is the issuance of malting barley contracts by the maltsters, which some of the producers think are priced too low and will result in a further loss of barley acres in the region, according to the report of Farm and Ranch of February 2.
“The malt companies have come out with their 2006 barley contracts and they were not up to the expectations of the farmers” according to executive director of the Minnesota Barley Growers Association, Marvin Zutz.“ We were a little disappointed in that we didn't think the barley contracts are high enough to be competitive with the other crops, so we might see a further reduction in barley acres.The producers had been hoping for contracts in the $2.70 to $2.80 range, which would be more competitive with the $3.80 average price for wheat we are currently seeing.”Instead, farmers are generally saying the contracts being offered by the malting firms are in the $2.50 to $2.60 range.
“We were hopeful that the malt industry and the brewing industry would understand that to attract good, loyal growers out here, year in and year out, they are going to have to start paying the growers to do it or else the growers are going to go with rival crops that are easier, less risky and more profitable to grow,” Zutz stated.
The large stockpile of feed and malting barley continues to exert downward pressure on prices, although malting barley prices have seen a upward movement in the past couple months due to less bushels produced in 2005 and the overall lower quality of the crop. Also, wheat and soybean prices have inched forward which means barley prices have to advance some in order to remain somewhat competitive for the acres.
“Some of the malt companies are just finishing up with the 2003 and 2004 crop and haven't even started on the 2005 crop yet,” Zutz noted. “So there is still an adequate supply for the maltsters.”
This barley surplus, combined with a lessened demand for malting barley due to lower per capita beer consumption and malting techniques that require less barley, don't lend much support for an improving malting barley market, according to Zutz.At this time Zutz estimates the average feed barley price being offered at elevators in northwestern Minnesota would range from $1.65 to $1.75 per bushel and malting barley prices are probably around the $2.
Zurück
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 .
