As spring sunshine warms the fields, Konen, 65, and other barley farmers worry tariffs will take away crucial export markets and increase the cost to grow the grains, even as sinking U.S. beer consumption has slashed demand for barley.

Why it matters: Reciprocal tariffs from Canada and Mexico may raise costs and limit export opportunities for U.S. barley growers, at a time when beer demand is also falling. 

“Down here on the farm we’re already stretched pretty thin financially,” said Konen, who is also vice president of the National Barley Growers Association. “It makes us wonder whether or not we can even stay in business.”

Roughly half of Konen’s barley is destined for Mexico, where it will be turned into beer. Some will be shipped back to the U.S. in bottles of Modelo, Corona and Pacifico.

Mexico is the third largest importer of U.S. barley and the biggest importer of U.S. malt, made from germinating kernels of barley and a key ingredient in beer. If Mexico issues tariffs in retaliation or switches to buying barley from other trading partners, experts say it could deal another economic blow to American farmers as U.S. consumers increasingly ditch beer.

Tariffs may decimate U.S. malt barley exports to Canada

Canada, the largest importer of U.S. malt barley, issued tariffs against U.S. barley and other agricultural goods that went into effect on March 4. Frayne Olson, crop economist at North Dakota State University, said farmers are worried that tariffs could decimate U.S. barley exports to Canada.

U.S. President Donald Trump has said his back-and-forth tariffs against major trading partners are intended to curb the flow of illegal drugs and migrants into the U.S., and has downplayed the market impacts for U.S. companies and consumers.

“The people who pay for tariffs are the farmers,” said barley farmer Steve Sheffels, vice president of the Montana Grain Growers Association. “We grow way more barley than we can possibly consume, so if those markets go away, then farmers are going to be competing for a much more limited number of buyers.”

Costs for fertilizer, which is mostly sourced from Canada, will rise with tariffs. Prices for imported crop chemicals from China have already risen because of tariffs that took effect on February 4.

“There’s a sinking feeling and a feeling of dread that things are bad, and things are going to stay bad for a while,” Sheffels said. “We are scared almost to death about tariffs.”

Beer consumption slowly declining

Beer consumption in the U.S. has been sliding and in 2024 it hit its lowest level in over 40 years as more Americans chose other alcoholic beverages, said Bart Watson, chief economist at the Brewers Association. Recently, hard seltzer drinks and canned cocktails have posed particularly bruising competition to beer.

Others are giving up alcohol altogether. Gen Z-ers and millennials are drinking less than most previous generations, according to a 2024 Gallup poll. In January, former U.S. Surgeon General Vivek Murthy called for cancer warnings on alcoholic drinks. Multiple high-profile studies have stated no amount of alcohol is safe to drink.

Watson believes major beer companies such as Anheuser-Busch, maker of Bud Light and Michelob Ultra, may keep prices steady to preserve market share and maintain sales volume. Craft breweries may be less able to absorb higher costs and are likely to raise prices, he said.

The 25 per cent tariffs the White House has slapped on metals will likely hike the costs brewers pay for kegs and cans, which are often made from steel and aluminum imported from Canada.

The price of a bottle of Corona or Modelo, both produced in Mexico, may be more likely to spike if U.S. malt is subject to tariffs by Mexico as it heads south and the finished beer is slapped with tariffs again as it is shipped north.

“Breweries are going to have to choose to pass this along or choose to eat it,” Watson said. “It will have an impact.”

The post With beer drinking down in U.S., barley farmers now fear tariffs appeared first on Country Guide.

“I think barley is something producers should always consider in their crop rotations,” the Centre’s managing director Peter Watts suggested.

“There are some advantages to growing barley. It’s an early maturing crop. It can be a week earlier than other crops. In terms of timing at harvest you can spread that out if you get your barley off early and follow with your wheat and canola,” Watts added.

He also noted input costs for barley are relatively low as farmers need to limit the amount of nitrogen, they apply in order to keep protein levels below 13 per cent.

“You can sell malting barley into the feed sector, but you can’t sell feed barley into the malting sector,” Watts explained, citing there’s often a premium associated with barley selected for malting. The Centre’s website that premium can be C$1 per bushel.

In the latest supply and demand estimates from Agriculture and Agri-Food Canada released on Jan. 20, the preliminary forecast for barley production in 2024/25 was pegged at 9.28 million tonnes, up from the nearly 8.90 million harvested in 2023/24.

For food and industrial use of barley, AAFC held its estimate for 2024/25 at the previous year’s 319,000 tonnes, while feed, waste and dockage was bumped up from 5.59 million tonnes to 5.95 million. As well, the carryover was nudged up from 750,000 tonnes to a projected 800,000.

As prices for canola and wheat have been getting hit hard in the markets lately, Western Canadian cash prices for malt barley have been unchanged for the last month, according to Prairie Ag Hotwire.

In Manitoba, the price stood firm at C$5.25/bu., while in Saskatchewan the crop fetched C$6.50 to 6.80, and it was C$6.50 in Alberta.

— Glen Hallick reports for MarketsFarm from Winnipeg. 

The post Technical centre wants farmers to consider barley appeared first on Country Guide.

Total barley production across the Prairies was down by 10 per cent on the year, at 8.707 million tonnes, according to the CGC. Average barley yields were placed at 61.3 bushels per acre in Western Canada, which was down from 70.5 bu./ac. the previous year and the 10-year average of 66.4 bu./ac.

AAC Synergy was the most popular malting barley variety seeded in Western Canada, while the area seeded with CDC Copeland continued to decline. The popularity of newer varieties, such as AAC Connect, CDC Fraser and CDC Churchill, increased noticeably, according to the CGC.

The malting barley was generally of good quality, with average protein levels steady on the year at 12.3 per cent. That compares with the 10-year average of 11.9 per cent.

The average test weight was 65.0 kg/hL, which was lower than the previous year’s average (66.7 kg/hL) and the 10-year average (66.9 kg/hL). The average 1,000 kernel weight was 46.8g, which is higher than last year’s average (45.0g) and the 10-year average (45.7g).

The newer varieties, such as AAC Connect, AAC Synergy, CDC Fraser and CDC Churchill that have kernels larger than AC Metcalfe and CDC Copeland, contributed to the overall high average kernel weight.

Soil moisture and precipitation were lacking in many areas through the growing season but a stretch of relatively cooler temperatures during a portion of July helped relieve some crop stress, as did haze from wildfire smoke, according to the report. Harvest operations started relatively early in August, as crop development was ahead of normal across a good portion of the Prairies due to the hot and dry conditions throughout much of the season. Occasional rain in August did lead to some sprouting and prevented the harvest from being completed in a timely manner.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

The post Good quality Canadian malt barley despite lower yields appeared first on Country Guide.

United Malt Group, whose Canadian assets operate under the Canada Malting banner, last month locked in on a previously announced deal to sell itself to France’s Malteries Soufflet for A$1.5 billion (C$1.3 billion).

Sydney, Australia-based United Malt and Soufflet reported Aug. 7 they now have written confirmation from Canada’s Commissioner of Competition that the office “does not intend to make an application” to challenge the transaction.

Thus, United Malt said, the condition for Canadian regulatory approval “will be satisfied” if the commissioner’s notice isn’t reversed by Aug. 23.

United Malt reported separately Monday that it and Soufflet now also have confirmation from the United Kingdom’s Competition and Markets Authority (CMA) that the CMA has “no further questions in respect of the proposed transaction.”

Much like the “no-action letter” Canadian regulators provide in such cases, “no further questions” is the CMA’s standard response when the authority doesn’t intent to mount a public inquiry into the deal, United Malt said.

The world’s fourth largest commercial maltster, United Malt makes bulk malt for brewers, craft brewers, distillers and food companies and has 12 processing plants in Canada, the U.S., Australia and the U.K., with combined malting capacity of about 1.26 million tonnes. It had been owned by Australia’s GrainCorp since 2009 and was spun off in 2020.

United Malt’s Calgary-based Canada Malting unit, which alone produces about 400,000 tonnes of malt per year, includes malting plants at Calgary, Montreal and Thunder Bay, nine country elevators in the Prairie provinces, and Country Malt facilities at Delta, B.C., Brampton and Calgary.

Soufflet, which has 28 malt houses in Europe, Asia, Africa and Latin America with combined production capacity of 2.36 million tonnes per year, has been an arm of French agribusiness InVivo since last year. InVivo has previously said it plans to be the world’s top malt firm within five years. — Glacier FarmMedia Network

The post Bureau won’t challenge takeover of Canada Malting parent appeared first on Country Guide.

Anglia Maltings operates seven malt facilities in the U.K., Poland, and Germany, with combined production capacity of 440,000 metric tonnes.

Privately-owned Richardson, which has operated since 1857, has been interested for 20 years in entering the malting business, but never found the right opportunity until now, CEO Curt Vossen said.

The deal fits Richardson’s strategy of processing the crops it buys from farmers, ranging from canola crushing and canola oil bottling to milling durum and oats, Vossen said.

“Now that we’re a food processor as well as an agricultural company, malting serves a fundamental purpose, it’s a natural fit,” he said in an interview.

Vossen said Richardson will buy European barley for its malting facilities.

He said Richardson will take time to understand the specifics of malting before deciding whether to expand the business.

The deal follows an announcement last week by French agribusiness InVivo of an agreement to acquire Australia-based United Malt in a $1 billion deal to create the world’s largest malt producer.

That deal, to be handled through InVivo’s Malteries Soufflet arm, was first proposed in March but now has approval from United Malt’s board of directors. Approvals from United Malt shareholders and regulators are still pending.

Among United Malt’s other assets in the U.S., Australia and the U.K., that deal would give Soufflet control of Calgary-based Canada Malting, which alone produces about 400,000 tonnes of malt per year.

Winnipeg-based Richardson, which employs over 3,000 people worldwide, handles and processes grain and oilseed crops. In 2021, it acquired Italgrani USA, North America’s largest durum wheat miller.

— Reporting for Reuters by Gus Trompiz in Paris and Rod Nickel in Winnipeg.

The post Richardson buys into European malt market appeared first on Country Guide.

“Producers have made their [planting] decisions for the most part. You might see people adjust their plans a little bit based on some of the fluctuations we are seeing in the market right now,” he said.

Agriculture and Agri-Food Canada (AAFC), in its March 2023 report, pegged the amount of barley to go into the ground this year at around 7.4 million acres. That would make for a 5.2 per cent increase over what was planted in 2022.

Of note, Statistics Canada is scheduled to issue its planted acre projections on April 26.

While malt barley prices are rather steady at this time, Watt pointed to the volatility in commodity futures, noting the recent sharp drop in canola prices and the upticks in wheat.

“Barley prices remain relatively firm in Western Canada. That would still encourage farmers to keep barley in their rotations,” Watt said.

Over the last month, malt barley prices have remained steady for the most part, according to Prairie Ag Hotwire. Old-crop in Saskatchewan continued to sit at $8.10 per bushel delivered, with Alberta at $8.40. In Manitoba, the price slipped back $1.50 at $6.90/bu.

New-crop bids stood at $7.30-$7.70/bu. delivered in Saskatchewan and $7.40 in Alberta. Prices for Manitoba were $6.40-$6.90/bu.

— Glen Hallick reports for MarketsFarm from Winnipeg.

The post Little change in barley acres expected appeared first on Country Guide.

In malting barley, there’s not only differentiation, there’s also an evolution beyond older, more familiar varieties which has been taking shape for the past decade. The two more familiar varieties — AC Metcalfe (registered in 1997) and CDC Copeland (registered in 1999) — are being eclipsed by newer arrivals — AAC Synergy, CDC Fraser, AAC Connect and CDC Churchill. All offer up-to-date genetics, improved disease resistance and better standability. Yet it’s a slow process: CDC Copeland remains the top variety among growers with AAC Synergy (registered in 2012) now the second-most widely grown variety.

Slow acceptance

It’s a long road to acceptance among growers, but then they’re not the only ones with a vested interest in how varieties gain a preferred status. A malting barley variety has to have the agronomic and disease packages to attract growers, the quality and malting performance that makes it attractive to maltsters, and good brewing performance characteristics and sensory attributes that make it desirable to brewers. It must have all three attributes or it risks losing traction.

“It’s one of the most difficult things that we face as an industry, and the intrinsic quality of a new malting barley variety is hard to assess initially,” says Peter Watts, managing director with the Canadian Malting Barley Technical Centre (CMBTC).

[RELATED] PGRs for malting barley? Maybe

For example, new wheat varieties are assessed and evaluated before they’re registered. A variety might yield well in test plots but if the end-users find it of poor milling or baking quality, it will never find its way into growers’ fields.

Although malting barley varieties are also evaluated before registration, the commercial evaluation by maltsters and brewers can take up to four years while sufficient volumes are produced for testing. In spite of that commitment, it can still be rejected.

“We get samples of new varieties and so do the commercial entities,” says Watts. “We test them at a micro and pilot scale and evaluate them to see how they perform. We have a sense of how they perform, but processing 50 kilograms of a sample and processing 250 tonnes are two completely different scenarios. It can take a couple of crop years of different qualities at a commercial scale for maltsters and brewers to fully understand how a variety performs.”

Consistent beer taste

The goal is consistency with any variety, whether it’s CDC Copeland or AAC Synergy or one of the new options like CDC Churchill. For growers, it’s the consistency of yield and performance in the field. For maltsters and the larger-scale brewers, it’s consistency that translates into a beer that tastes the same, time after time.

Finding that consistency can be an extensive and expensive process. Watts says it can take years to ramp up production, all while testing for the proper traits. But it also requires contributions from public sector breeding and research programs. Growers, government, processors and end-users all invest in development of new varieties, so there’s a need to capitalize and garner a return on investment with newer genetics, improved yields and better disease packages.

“We’re not going to stay competitive with countries like Australia or France or Argentina if we don’t continue to advance our genetics,” says Watts. “Crops like wheat are increasing their yields with new varieties. Farmers could say, ‘I can grow a hard red spring wheat at 65 bushels per acre which is a 25 per cent improvement in yield in the last 10 or 15 years, but with barley, I’ve seen a 15 per cent improvement in yields, so I’ll grow wheat instead’. To keep barley competitive, we need to get these new varieties accepted but it’s particularly complicated in malting barley for those reasons.”

[RELATED] Winning the barley battle

Supporting the future

Todd Hyra echoes Watts’s comment about remaining competitive and has fielded growers’ questions about staying with CDC Copeland or AC Metcalfe. He agrees that the new barley varieties need to compete or else farmers will stop growing them.

“Those four new products that are coming along offer a yield bump over Copeland of eight to 10 per cent in many cases, and compared to Metcalfe, it’d be 14 to 18 per cent higher yield,” says Hyra, western business manager for SeCan. “We have lots of varieties that have malt characteristics, but the final steps are up to the CMBTC.”

At its height, AC Metcalfe was the right product for its time, seeing quicker acceptance alongside CDC Copeland, which struggled initially. They provided consistent flavour and consistent experience in the malthouse which are qualities that are hard to replace. But Metcalfe is now 25 years old and Copeland is 23: it’s time for newer, better varieties that are acceptable to maltsters and brewers.

Commercial varietal development in barley comes with the support of the CMBTC and the Brewing and Malting Barley Research Institute (BMBRI) in Saskatoon, with funding provided collectively from seed companies, growers, maltsters and breweries. Knowing whether a product has the malt extract, the flavour profile, and a not-excessive level of beta-glucans can help ensure a variety will work in a malthouse.

“The growth of a new variety can be exponential, and if participants don’t like it, it’s best to head it off before it gets too big,” says Hyra, explaining that malting barley is identified by variety and malted as an individual product. “They may be blended at some point in time but they’re variety-specific at the outset. The biggest boost we get is when the maltsters are willing to participate and do pilot-scale malts from some of the new varieties in their early stages.”

Most malting barley is grown in Western Canada. Hyra says Eastern Canada’s hot and humid summer remain a limiting factor for its expansion, especially when compared to current traited technologies for corn and soybeans, and higher-than-normal commodity prices. Although malting barley can provide a premium, Hyra acknowledges having it accepted can be what he calls “the malt lottery.”

“The last couple of years with the runup in demand for feed stocks in wheat, barley and oats, it didn’t really matter, and there were some cases where the feed market would pay as much or more than malt,” he says. “Malt’s going to have to see a correction to move back, because I see it as a premium product: it’s not even a food, it’s a luxury item, so it really should capture and reward producers for going above and beyond.”

The post Consistency is key when it comes to growing malt barley varieties appeared first on Country Guide.

Wheat “is not pulling barley prices with it, as far as we can see on our end,” Moric said, noting that a lack of demand has kept prices stable.

“Some of these malting companies are getting coverage locally. Based on the feedback we have been getting from the farmers, even with their local companies, there simply isn’t as much demand as there used to be,” he added.

Moric said a few days will go by in between dealing with barley and those farmers willing to part with it have been selling less volume.

Moric pointed to old-crop barley in particular to highlight the lack of demand, with a small gap between it and new-crop.

Old-crop barley, he said, was going for $8.50 to $9 per bushel picked up as of Monday, — the same range as on Friday.

Meanwhile, he said new-crop barley was fetching $7.50-$8/bushel on Monday, down from $8-$8.75 from the previous Friday.

— Glen Hallick reports for MarketsFarm from Winnipeg.

The post Low demand for barley keeps prices stable appeared first on Country Guide.

Feed barley is trading in the $4-$4.95 per bushel area in Alberta, according to Prairie Ag Hotwire data. Prices top out at just over $4 per bushel in Manitoba and Saskatchewan.

Feed bids typically see some strength in the spring, as farmers turn their attention to spring seeding and away from delivering grain. Spring road bans that hamper logistics can also lend some support.

However, a large amount of spring-harvested grain will soon be looking for a home across the Prairies, and the anticipation of those deliveries should be limiting nearby demand.

Large carryout supplies and expectations for increased Canadian barley acres in 2020 are another limiting factor.

In addition, declining beer demand, as bars and sporting events shut down due to the COVID-19 coronavirus pandemic, may cause some malt barley to move into feed channels instead.

A number of brewers and distillers have already shifted some production capabilities away from making beverages and are making hand sanitizer in an effort to help fight the virus.

— Phil Franz-Warkentin writes for MarketsFarm from Winnipeg.

The post Feed weekly outlook: Spring rally unlikely appeared first on Country Guide.

“You are kind of in a sea of sameness,” says Morton, who has worked with all types of farms, not only vegetable and fruit producers, helping individual farm businesses develop value-added products and build brands for what they produce.

Morton has followed clients from the idea stage right through to commercial product selling in both domestic and export markets, and he sees more farms making the jump into value-added production.

Value-added production needs a very different management approach with distinct management skill sets, Morton says. “It’s a mind shift. You have to educate consumers and you have to promote that product. Just getting it on to the shelf isn’t promoting it.”

Morton says he’ll stress to anyone considering a value-added venture that before you invest in it, crunch the numbers. And this means doing plenty of groundwork in advance to know if your intended customers perceive value in what you want them to buy.

“The only opinion that really matters when you’re value adding is the person’s who is going to give you money for that product,” Morton says.

“It’s very easy to get caught up in the hype of the whole thing. You can say ‘I like the product. It’s interesting.’ Therefore everyone should like it.”

Ahead of time, Morton says it’s essential to ask, is there enough demand, who will want what you’re going to produce, will they pay, do they have access to it and who’ll distribute it?

“These are all key questions when you’re starting to look at this. The best way to do this is from the point of view of what does the customer need and how am I going to fulfill that need?”

Where failures happen is when people skip asking those questions and charge ahead. They may invest in processing equipment, or build up volume. All too often that’s motivated by concern someone is going to steal your idea or seize the opportunity ahead of you.

The bad news arrives when it’s time to market what you’ve produced, so he sees a need for more resources to support entrepreneurs in that area.

Ironically, getting financing for marketing is also a very tough sell with lenders, Morton says. “But you have to market the product and you have to spend money to do that.”

How big is value added?

On-farm value-added processing is as varied and vast as agriculture itself — from canola crushing, meat packing and dairy processing, to tiny small-scale ventures producing specialty artisanal breads.

It’s a growth sector, but Martin Gooch, chief executive officer with the Ontario-based Value Chain Management International, believes we need to broaden the definition because for primary producers, value adding is really about improving margins and capturing more value from whatever they may be producing.

“‘Capturing value’ is maybe a better term than value added,” Gooch says. “Value added is both about capturing ways of increasing revenue but also reducing costs. The value is both about the cost of producing something and the revenue producing it. Either way the purpose is to benefit financially.”

Gooch also thinks more farmers can benefit from being more direct participants in the value chains they engage with.

Today, a rough estimate says 10 per cent of all farmers proactively participate in value chains. Those who succeed, Gooch says, are focused on what consumers and customers value. They are producing the right product consistently, have developed effective logistics and distribution systems, and effectively communicate and inform.

“It’s how they seek to manage their operations in relation to the value chain in which they operate that differentiates those farmers who are able to add value by working with their customers and suppliers to improve the efficiency of operations within and between firms, and the effectiveness of creating value for the end-consumer,” Gooch says.

Gooch said he does think the category of value added needs broadening.

“We put too narrow a definition on it,” he says. “A farmer going to a weekend farmers’ market could be considered value added and, for individual farmers, it is,” he said.

That’s direct marketing activity, but it does not seem to be an especially high focus of activity by Canadian agricultural producers.

The 2016 Census of Agriculture reported just 13 per cent of farms sell directly to consumers, suggesting the vast majority continue to sell through intermediaries in supply or value chains.

The census also asked what share were selling value-added products as opposed to unprocessed raw commodities. About 14.4 per cent.

The post Why marketing is the test, no matter how great your idea appeared first on Country Guide.