Barley market prices steady to slightly higher Farm and Ranch Guide: Markets

Harvest pressures, which normally depress barley prices at this time of the year, haven't had too much impact on either the malting or feed barley markets in the past few weeks.

Even though good yields and high quality malting barley crops have been reported in much of eastern North Dakota and northwestern Minnesota, the malting prices remain strong, with an average elevator board price of around $6 per bushel, according to Kelly Kotowicz at the Alvarado Farmers Elevator in Alvarado, Minn., although he has been paying $6.20 for the last two weeks.

The barley harvest in his area is about 90 percent completed and farmers are reporting good quality and slightly above average yields as combining nears completion.

“The barley crop was good to excellent,” Kotowicz noted. “The VOM levels are very low, really good plump and test weights were good. And the yields were slightly above average.

“As far as the future for malting barley, I feel we are going to stay at these levels until we can get a feel for what the crop is in Canada, and we are hearing some horror stories on the crop out in southwestern North Dakota. But with the bumper crop we have here, that should take up some of those lost bushels out there.”

For those growers who had a crop that was a little low in quality, Randy Brag in the Aug. 15 column, noted that malting barley growers who are faced with low plump kernel counts can run the barley over a cleaner and remove some of the thin kernels. This would bring up the plump count to help make malting specs.

This suggestion prompted a comment from the American Malting Barley Association's Scott Heisel, who noted that those with a malting barley endorsement in their Federal Crop Insurance coverage might be eligible for receiving a payment that would go toward the cleaning costs to upgrade the barley samples.

“I would encourage growers to contact their Federal Crop Insurance representative to see if their coverage allows for some payment for this operation,” Heisel said. “Everyone comes out ahead if the growers are able to improve the quality of their crop by this method.”

Even though the 2008 crop still isn't completely harvested, Kotowicz reports that the malt company they contract acres for, Malt Europ, is starting to offer 2009 contracts. He noted there was little interest at first in the 2009 contracts, but once the crop started coming in and the growers had some idea of what their fertilizer and other input costs were going to be, the numbers are starting to look pretty good for next year.

“Some have decided they are going to raise barley for sure next year and are showing interest in the contracts,” he said. “If they can get the yields they are going to make some money, if they don't get the yields then they are in trouble.”

And not all of the barley for 2008 was raised under contract to a malting firm. The Alvarado elevator is currently buying up quite a bit of open malting barley at the current price, according to Kotowicz.

The latest Economic Research Service (ERS) report from the USDA left the domestic barley crop production unchanged at 218 million bushels, which is up 6 million from 2007. The service projected an average yield in the U.S. of 59.9 bushels per acre.

The ERS also indicated prices received by farmers for barley in the 2008/2009 marketing year would be in the $5.40 to $6.40 per bushel range. This compares with the reported average price of $4.02 for 2007/2008.

Much of the other barley production areas of the world are reporting larger crops. For instance, a recent report from Ukraine indicated the crop this year will be the largest in a decade, with barley production up by over 40 percent from last year.

Closer to home, a survey of elevator board prices on the website smallgrains.org indicated prices were steady to slightly higher over the past two weeks. Feed barley prices were 20 to 25 cents higher and were in a narrow range of $3.65 to $3.70 a bushel.

Malting prices were steady to 15 cents a bushel higher, with the low end of prices at $5.65 and the top end at $6.10 a bushel. For those elevators quoting both feed and malting prices, the price differential average around $2 per bushel.