Barley Field Update: Malt Barley Prices

Our climate was both a help and a hindrance to the malt barley market this year.

“The 2013 crop was very good, but ’14 and ’15 have been a struggle,” said Bob Sutton, vice-president with Rahr Malting out of Alix, Alberta. “This year, a combination out west of drought-like conditions early in the growing season and rain at harvest time produced low quality malt barley with a lot of sprout damage and high protein levels.”

Rain Clouds with Silver Linings

Weather may have lowered the boom on quality, but it raised malt barley prices in the process. With less barley meeting the stringent requirements for malt, cash prices for delivered elevator malt barley range between $5.25 and $5.75 per bushel according to Prairie Ag Hotwire.

“That’s about $0.50 a bushel higher than at this time last year,” said BCC chair and producer Brian Otto, “and it reflects industry expectations around the size and quality of the malt barley crop.”

Good, Bad or Ugly?

So are higher prices a good thing? It depends who you ask.

“It’s not the ideal scenario for us, but our competitors are equally affected,” said Sutton. “As for our brewers, most of them understand that you have to give farmers a fair price to get good barley, as no barley means no beer.”

For companies that plan ahead, the impact is minimal.

“We contracted all of our grain at lower levels,” said Patrick Rowan, senior manager of Canadian barley operations with BARI-Canada Inc., a division of Anheuser-Busch InBev.

Producers like Otto also work with contracts, but some barley farmers can benefit from the increase.

“People are searching for good quality and paying for it,” said Rowan. “With other grains down in price, barley represents good cash value for farmers and could help pay some bills, especially if they move it off the combine before Christmas.”

Maybe best of all, Rowan doesn’t anticipate higher beer prices for consumers, and that’s a relief. If you thought the weather was a hindrance, try asking a pub patron to ante up more for his favorite brew. Now THAT could be ugly.

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