October 18, 2013
US feed barley prices drop in the last fortnight
US feed barley prices have gone over the cliff, with a US$0.60 drop in prices that pulled them into the sub-US$3 range, over the past two weeks.
According to Jeremy Burkhart, grain division manager for Sun Prairie Grain in Minot, North Dakota, the reason for the decline is the continued softening of the corn market and a total lack of demand for feed barley.
Burkhart said that feed barley shipments into California have been reduced due to the leaf beetle quarantine in the state. This has impacted all elevator shipments of wheat, oats and barley to California, which normally purchases a significant amount of feed barley for use in the state''s dairy industry.
The export market is also pretty quiet, but if the prices for feed barley continue to slide south that activity may pick up, Burkhart said. At this time, feed barleyis hovering in the US$2.70 a bushel range, compared to US$3.30 just two weeks ago.
Moreover, cash malting barley prices have held steady at US$4.50/bushel, although Burkhart noted there is very little barley grown now that isn''t under contract. They are still bringing in the last of the 2012 crop, with about 10% still being stored out on the farms. That should be called in shortly and then they will immediately go to the 2013 crop.
This current year''s malting barley supply should be in good shape as the acceptance rate into the malting class will likely be around 90%, instead of the normal 70% to 75%. The quality of this year''s crop in the Minot area has been good for the most part, according to Burkhart. There were a couple areas where the Volt-Ohm meter (VOM) count was a little high, and some of the lacey barley had a problem with ergot.
Looking ahead to next year, there is nothing firm yet on contract prices for malting barley from Rahr Malt, the maltsters for which Sun Prairie Grain contracts acres.
He did note, however, that many of those deciding whether to plant winter wheat this fall or barley next spring choose the winter wheat route in the end.
It isn''t only barley contracts that are experiencing new crop contract problems, he said, but really it applies to many of the commodities. Last year at this time they had some considerable acres of rapeseed, sunflower and barley under contract and this year they have no acres contracted yet.