February 13, 2008

 

Marketing monopoly casts uncertainty over Canadian barley acreage
 

 

The Canadian grain industry is debating how the Canadian Wheat Board's barley marketing monopoly will affect barley acreage in the 2008-09 (Aug-Jul) crop year.

 

Doug McBain, past president of the Western Barley Growers' Association, said he believes fewer acres will be seeded with barley this coming spring as CWB's poor price offerings would dissuade Canadian farmers from planting barley.

 

"If you have the location and soil conditions required to grow anything but barley you will, because barley is the poorest margin crop," he said. 

 

Mike Jubinville, farm consultant with ProFarmer Canada, said that from a historical perspective, barley prices are high, but compared to other crops this year, barley prices are on the low end of the spectrum.

 

Farmers will also be looking for certainty as to what type of marketing system they can expect, according to Jubinville.

 

"In light of the uncertainties regarding marketing systems for barley for the year ahead, people want some clarity as to what kind of a system they will be operating in," he said, adding that with uncertainty in barley, farmers would be planting wheat to lock in profits.

 

However, Joe Wang, Coarse Grain Analyst for the Market Analysis Division of Agriculture and Agri-Food Canada said strong domestic usage, combined with lower carry-in stocks, will encourage the planting of barley.

 

Barley has a larger domestic market than wheat.

 

Wang, in his Feb. 5 report, he forecasted just a 0.5 percent increase in barley acreage, to 10.922 million acres.

 

He also predicts a 14-percent drop in exports for 2008-09 to 2.4 million tonnes while domestic usage is expected to rise 12 percent to 9.435 million tonnes,

 

The increase, according to Wang, will be the result of increased supply and lower feed barley prices.

 

Wang stressed that although change in marketing choice for barley could affect 2008-09 crop year estimates, the report assumes a continuation of current marketing conditions.

 

McBain meanwhile, said he does not expect the barley marketing dispute to be settled anytime soon, despite meetings between the CWB, the Canadian government and key industry players.