Why is the malting barley price dropping?

Malting barley supplies in Western Canada are limited due to the bad harvest. Meanwhile, continuous rains in Eastern Australia over the past three weeks have cut the Aussie supply of malting barley. So why is the Pool Return Outlook for malting barley continuing to drop? Shouldn’t the price be rising? In the latest PRO released yesterday, malting barley is down another dollar a tonne. Two-row with average Saskatchewan freight and handling deducted now has a PRO of only $3.96 a bushel. That’s not much of a premium over feed barley. In this case, the reduced supply of malting barley is hurting the pooled price. There’s a limited supply to market into the higher world prices. Lower prices locked in earlier in the year are accounting for a bigger and bigger percentage of the pool, dragging down projected value. The price outlook for next crop year is a lot brighter. I’ve heard of at least one company offering a Cash Plus price of $5.75 a bushel. Unfortunately, that contract does not have an Act of God clause. Hopefully, there will be more companies with Cash Plus offerings. There should be a desire by companies to lock in a malting barley supply for next year.

I’m Kevin Hursh.

DynAgra, an independent Western Canada-based Company, is dedicated to providing growers with the tools to manage the risk and maximize the profitability of their farm business through the continued innovation of agricultural products and services. We are committed to developing and providing growers with the latest in precision agronomics, variable rate technology, soil fertility, crop protection, fertilizers, custom application and financial solutions.