Craft brewing gives malt barley prices a hop

Acres are seen rising by about five per cent this spring

While overall beer consumption is seen as flat, the amount of craft beer produced in North America has been rising.

The craft brewing industry appears to be providing the fastest-rising demand for malt barley, which has been steadily pushing prices higher — but overall reduced demand for beer and increased acres could keep a lid on that strong pricing.

“Many maltsters are either 100 per cent craft, or moving the percentages up all the time to sell to the craft industry,” said Rod Green, manager for Central Ag Marketing at Airdrie, Alta.

“So consequently that’s going to increase demand for malt, and as demand for malt increases that will strengthen the price.”

As of 2014, the amount of craft beer produced had been rising at a rate of 18 per cent per year in the U.S., according to a report from the Brewers Association.

New breweries are opening every day in North America, “but saying that, the beer consumption in North America is very flat,” Green said.

Beer has been losing market share to wine and liquor. In 2004-05 beer controlled 49 per cent of the market in Canada, and as of 2014 controlled 42 per cent, according to Statistics Canada.

Delivered elevator malt barley runs between $4.90 to $5.75 per bushel in Manitoba, the only province with that data readily available, according to Prairie Ag Hotwire.

But for the most part, old-crop malt barley is essentially done, Green said.

“Export, domestic, everything is pretty well covered and wrapped for the year,” he said.

New-crop malt barley prices range from $5.05 to $5.25 in Manitoba and Saskatchewan, according to Prairie Ag Hotwire.

Agriculture and Agri-Food Canada’s estimates peg barley’s seeded area — including malt and feed — at 6.67 million acres, compared with 6.53 million last year.

Green expects malt acres to increase by about five per cent.

“It’s grown principally on contract, particularly with domestic maltsters, so it’s slightly higher again this year.”

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