The long-awaited USDA's March 30 Prospective Plantings report and the latest grain stock numbers contained supportive news for the feed and malting barley markets, according to Marvin Zutz, executive director of the Minnesota Barley Growers Association.
"As far as the state of Minnesota, we were pleased with the acreage report," Zutz said. "The maltsters came out with some very aggressive bids in hoping to attract some barley acres and it seems like they were successful in doing that. And North Dakota should be very pleased with their increase in acreage, which was more than anyone expected."
Nationwide, the barley acreage is expected to increase by 30 percent - from 2.6 million acres last year to 3.3 million acres this year, according to the USDA Prospective Plantings report. The report indicated farmers in North Dakota expect to plant 980,000 acres compared to 400,000 last year, while Minnesota growers intend to plant 110,000 acres this year compared to 70,000 acres last year. Barley acreage in Montana is expected to grow from 700,000 acres last year to 810,000 this year.
"The planting intentions and the stocks report that also came out today were very bullish for all commodities," Zutz said on March 30. "The stocks report was very bullish for corn, soybeans and wheat, and hopefully that will drag barley along."
Barley stocks in all positions on March 1, 2012, totaled 93.7 million bushels, down 32 percent from March 1, 2011. On-farm stocks are estimated at 26.5 million bushels, off 54 percent from a year ago, while off-farm stocks are 16 percent less than a year ago at 67.2 million bushels. For the period December 2011-Feb. 2012 the report indicated disappearance totaled 45.3 million bushels, 7 percent above the same period a year earlier.
Zutz indicated the maltsters have pretty much contracted all of the barley they intended to contract this year, so with the increase in acres reported, he figures there may be some additional open market barley on the market. That, he said, could be negative to barley prices, but it will be later in the season when that could come into play. However, given the current situation, he expects the maltsters will be back with some very attractive contracts later this year for the 2013 growing season as they try to maintain the acreage they need.
In regards to current feed barley prices, he noted that they are connected to corn prices and, with the supply of corn down considerably from what it was the year before, we are likely to see steady to higher corn prices.
"And since feed barley prices are tied to corn, the higher the corn prices go, the higher the feed barley prices will go as well," he said.
Currently, a review of spot cash elevator prices in the region indicates feed barley prices are in the $4.60 range and malting barley prices are averaging around $5.80 per bushel.
The early start in the fields is also working to the advantage of barley producers, he noted. Most of the barley in the Fergus Falls, Minn., area has already been planted as of March 30 and they have had a rain on it already. However, north of Highway 2 there has been little field activity yet, except in the Fisher, Minn., area, mainly due to a concern over a frost once the crop has emerged. But the growers are still hoping to get their barley seeded early this year.
"It's always nice to get the crop established before we get into that July heat pattern, so the sooner we get in, it usually shows up in increased yields," Zutz said. "I am very optimistic on the prices right now, and hopefully the farmers will get an early start this year."