The report by the Canadian Malting Barley Technical Centre (CMBTC), in collaboration with the Manitoba Crop Alliance, says new Canadian malting barley varieties can be grown successfully in Manitoba.

With yields and quality comparable to the check variety — AAC Synergy — the study found new varieties including AAC Connect, CDC Fraser, CDC Copper, CDC Churchill and AAC Prairie are the next generation of varieties for Manitoba growers, the CMBTC said in a release Friday.

“The study showed that these new varieties offer good agronomics and the high end-use quality traits that are the hallmark of Canadian malting barley,” CMBTC managing director Peter Watts said.

According to the Manitoba Crop Alliance, total barley acres, whether for feed or malting, have declined over the last two decades on “a combination of disease concerns, market forces and difficulty to meet malting grade.”

That said, seeded acreage reports from Manitoba Agricultural Services Corp., the provincial crop insurance agency, have found Manitoba barley acres steadied in the years 2020 to 2023, at a level between 365,000 and 400,000.

Producers in Manitoba have struggled with diseases such as fusarium head blight in malting barley, but with improved disease resistance packages, better fungicide products and improved management practices, fusarium has not been a significant issue in recent years, CMBTC said.

Producers growing malting barley varieties have the option of both malting and feed markets. With a malt barley variety, farmers gain an additional 2.5 million-tonne market that they could not access with feed varieties, the centre said. As well, malt barley generally offers a premium of around $1 per bushel or more.

“Manitoba is one of the best barley producing regions in the world,” Manitoba Crop Alliance CEO Pam de Rocquigny said in the same release. “This success can be attributed to climate and geography, and our advanced farming practices.”

Barley is a good cereals crop option, as it provides many benefits when included in crop rotations. It can be planted early in the growing season and is both competitive and high yielding. Furthermore, including barley in crop rotations can provide flexibility during harvest, as it matures early, allowing harvest to be spread out between crop types, the centre said.

“In combination, these attributes make barley a great option for farmers,” says de Rocquigny.

Registrations of new malting barley varieties for producer use in Canada in recent years led to the need to evaluate those new varieties in field-scale trials, under Manitoba growing conditions, to provide data for that province’s growers on how new varieties could fit in their cropping systems.

More details from the CMBTC study can be viewed on the Manitoba Crop Alliance website.

Several companies in Manitoba source malting barley to supply domestic and international markets including CMBTC members Cargill, Richardson, Viterra, Malteurop and Boortmalt, among others.

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“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.

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“It will be an extremely tight and difficult year for the malt processors and ultimately for the brewers as well,” said Peter Watts, managing director of the Canadian Malting Barley Technical Centre (CMBTC) in Winnipeg.

“Not only did the hot, dry summer lead to a significant reduction in yields, it also impacted quality,” said Watts, noting higher protein levels were a big issue this year.

The rains that eventually came hit right at harvest time, “adding insult to injury” by leading to quality downgrades.

Total Canadian barley production in 2021-22, which includes feed barley, was estimated at 7.1 million tonnes by Statistics Canada. That compares with the 10.7 million tonnes grown the previous year.

Preliminary data from the Canadian Grain Commission show average protein levels for barley selected for malting in 2021 coming in at 12.8 per cent. That’s the highest of the past decade and well above the 10-year average of 11.7 per cent.

Maltsters typically like lower-protein barley, and Watts noted they are expanding their specifications in order to account for the higher protein levels. “Stuff that normally wouldn’t be accepted, will be accepted this year,” said Watts.

Higher-protein malt barley create processing challenges, including reducing alcohol extraction levels, altering water absorption, and leading to hazy beer.

The larger brewing companies may adjust their recipes to use more adjuncts, such as rice or corn, to compensate for the tighter barley supplies, but Watts said craft brewers don’t have that option.

The CMBTC is currently working with higher-protein samples to come up with modifications maltsters and brewers can use to adapt to this year’s crop, Watts said.

Some export customers do like higher-protein malt barley than is typically used in North America and would be a potential buyer for higher-protein grain in a year with more normal yields, but Watts expected export movement would be down in 2021-22.

“We’re just so short this year, there isn’t enough malting barley to go around,” he said.

“We’re in uncharted territory… people are not often forced to work with this kind of quality.”

While there will be challenges, one possible bright spot to come out of the year was the fact that maltsters will be forced to work with newer varieties that they may not have selected in the past, offering opportunities for those varieties to gain traction, Watts said.

Research into how the different varieties fared this growing season was ongoing, he added, with results and recommendations for 2022 to come shortly from the CMBTC.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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Peter Watts, managing director of the Canadian Malting Barley Technical Centre in Winnipeg, said rising demand from China is also raising prices for feed barley, urging growers to sell their crop and deplete domestic supply.

“They’re emptying their bins and prices have remained really strong,” he said, adding that carry-out stocks will be “very low” this year.

He added that 500,000 tonnes of new crop have already been slated for export to China this year. Domestic supply has already been reduced so much that high-quality malting barley has found its way to feed channels.

“In a year like this, (the barley) may be malt quality but the prices are so strong that producers have decided to take the cash and sell their malting barley into the feed sector,” Watts said. “It’s too bad to lose that good-quality malting barley, but if the livestock industry’s willing to pay for it, that’s where producers are going to sell it.”

In Agriculture and Agri-Food Canada’s latest forecast from January, seeded area for Canadian barley is expected to decrease seven per cent to about 7.17 million acres in 2021-22, citing competition from oilseeds. Meanwhile, production would decline by 12 per cent to 9.5 million tonnes.

Watts disagrees with that assessment. “We could see a five to 10 per cent increase in seeded area,” he predicted.

“I think producers will respond by seeding more barley this year, given the good prices. Assuming an average yield, we might see a bump in production next year.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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With domestic feed barley prices rising and domestic supplies shrinking with increased exports to China, high-quality malt barley has found its way to feed channels as growers look to sell their crop high.

“Producers have decided to sell their malting barley into the feed sector,” Peter Watts, managing director of the Canadian Malting Barley Technical Centre in Winnipeg, explained.

“There’s not a lot of incentive for farmers to sell their barley as malt right now. If the end user of malting barley wants to buy 2020-crop malting barley this year, they’re going to have to pay up, but buyers aren’t showing that premium right now.”

According to Prairie Ag Hotwire data from Wednesday, high-delivered bids for malt barley in Manitoba traded at $5 per bushel, compared to $5.25 for feed barley in the same province. Feed barley in Saskatchewan and Alberta was trading as high as $5.50 and $6.64/bu., respectively.

Despite losing the premium malt barley had over its lower-quality counterpart, a trade war between China and Australia, resulting in the former imposing an 80 per cent tariff on Australian barley imports last May, has boosted the demand even higher for Canadian malt varieties.

“We have a good malting barley export program with strong demand in China this year. With the very high prices recently, the demand has tapered off a little bit. China is looking for less expensive options, but there aren’t a lot out there,” Watts said. “Buyers are being scared off right now by the very strong prices.”

He also expects Chinese demand for malting barley to continue, as well as increased demand at home as bars and restaurants reopen.

“I hope farmers will grow malting barley varieties, because the new varieties yield very well and they give them an option for that extra 2.5 million-tonne market for malting barley that they wouldn’t otherwise have if they just grew a feed variety.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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“We’ll lose a lot of malting barley this year, because of the weather,” said Peter Watts, managing director of the Canadian Malting Barley Technical Centre.

While harvest is near completion in some areas of Manitoba, Watts said “it’s a real struggle this year” on a more general level across all three Prairie provinces. “There’s a lot of barley still out there that hasn’t been harvested.”

Adverse weather in the spring also split up seeding, with some of the barley crop going in early and other fields late due to rains in May. That wide planting window adds uncertainty to the final quality.

Anecdotal reports for what has come off so far are highly varied. Watts said that while there have been some reports of good-quality malting barley, he had also heard of more chitting than normal.

Chitted barley, also called pre-germination, refers to grain that has prematurely started to sprout before being harvested. Chitted barley can still be made into malt shortly after harvest, but degrades quickly in storage.

Staining will also be a problem due to the rain, Watts said.

Canadian farmers did seed a larger barley crop this year, and Statistics Canada’s August survey pegged production at 9.6 million tonnes — well above the 8.4 million tonnes grown in 2018-19 and the previous five-year average of 8.1 million tonnes. Watts said some estimates still point to a crop of 10 million tonnes or more.

“We’ll have a pretty big pool to choose from, but if the weather doesn’t smarten up it will compromise a lot of the quality,” said Watts.

“Quality will be all over the map this year, and it will be a struggle for grain companies and malting companies to find enough good quality malting barley.”

Canada’s domestic malting industry typically takes about one million tonnes per year. Canada has also been exporting over a million tonnes of malt barley on an annual basis in recent years, which means the country needs at least two million to 2.5 million tonnes of malt barley.

Watts was confident that the demand would be met, but said end-users may have a harder time finding supplies.

“There’s no question that we’ll see feed prices ease off,” he said, noting the price spread between feed and malt barley will likely widen.

Feed barley bids over the past winter were strong due to tight supplies and even traded at a premium to malt in some cases. In 2019-20, producers with unpriced malt-quality barley will be looking for prices to go up, said Watts.

From a protein standpoint, early indications are for slightly lower average protein barley compared to the past few years, which Watts said was a function of larger yields.

In 2018-19, Canada’s malt barley averaged 11.9 per cent protein, according to Canadian Grain Commission data. Watts expected the 2019-20 selected barley would be in the lower 11s.

— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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“All indications suggest we’ll see an increase in malt barley, as well as feed,” confirmed Peter Watts of the Canadian Malting Barley Technical Centre.

In light of China’s consummate ban of Canadian canola, some worry other commodities will be treated similarly. However, there aren’t yet any indications that that is the case for malt barley.

According to Statistics Canada, China’s demand for barley and malt is expected to increase steadily due to China’s lower grain production due to urbanization and limited farmland.

“It’s impossible to predict what will happen but there aren’t any indications that Canadian malt barley will be shunned to the same extent as Canadian canola,” he said.

Though China has a history of importing the majority of its barley and malt from Australia, Canadian-grown malt is steadily increasing its market share.

Australia grew 60 per cent of China’s imported barley in 2016, while Canada accounted for 20 per cent. However, given Australia’s inclement weather in recent years, Canada has gained some of the market share in China.

“Australia had a severe drought which curtailed their production significantly,” Watts said. “If they return to normal crop levels they’ll be back competitive on the global market.

“Malt barley production depends heavily on harvest conditions, particularly weather, so we’ll have to wait and see what sort of supplies there are.”

Aside from increased acreage, Watts hopes to see diversity in varieties of malt barley.

“As an industry, we’re looking to transition to new varieties,” said Watts. CDC Copeland and AC Metcalfe have dominated the industry for almost 20 years.

“We expect AC Metcalfe acreage to decline as new varieties increase,” he added.

“We’re looking for these varieties to be produced in more substantial quantities and become a mainstay in commercial systems in Canada and abroad.”

— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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“We get our base malt locally, but we don’t have any maltsters in the province making the specialty malt we need,” Colin Enquist, sales and marketing manager with PEG Beer Co. in Winnipeg, said via email.

The specialty malt being imported from the U.K., Germany, and other countries “comes down to the availability and some suppliers just having a better product,” he said.

Malt is created through a three-step process which sees grain soaked, germinated, then kilned, converting the starches in the grain into sugars.

Variations in that process, from the grain used to how long the end product is kilned or roasted, can impact the flavour of the resulting beer.

“We’ve actually had a couple people come into the pub and ask if they opened a specialty malt shop if we’d be interested in buying more locally grown malt,” said Enquist, adding “we absolutely would buy all local if we could and it was to the quality we need.”

An added irony of the situation is that in some cases the European malt finding its way into Canadian beers could have been created using Canadian barley to begin with, said Lawrence Warwaruk of Farmery Estate Brewery at Neepawa, Man.

The Farmery brewery creates beer using grain grown on its own farm, but that barley is still malted offsite through an agreement with the Malteurop facility in Winnipeg.

“There is definitely a market for specialty malts,” said Warwaruk, adding that while the large malting companies “do a fantastic job of what they do,” specialty malts have a higher value and could find a home both domestically and even abroad.

“You need to create a demand for locally sourced barley, malted locally, and sold locally,” he said. His company has looked into malting its own grain as well.

The Canadian Malt Barley Technical Centre (CMBTC) in Winnipeg runs training programs a few times a year for aspiring maltsters and those already in the industry.

Peter Watts, managing director of the CMBTC, noted the craft malting sector is very small in North America, accounting for less than one per cent of the total malt production.

He estimated that of the 40 to 50 craft maltsters in North America, only about half a dozen were in Canada. However, he said, there was plenty of interest from the craft industry.

“With the growth and expansion in the craft brewing industry in the last ten years, it has created demand for craft maltsters,” said Watts.

From a theoretical perspective, malting grain is rather basic, but in practice “it’s a pretty big investment up front,” said Watts.

Matt Hamill of Red Shed Malting in Red Deer went through the CMBTC course and is now operating a small-scale maltster. The company’s genesis came from a conversation between Hamill’s father, a farmer, and his brother, who was brewing his own beer.

“Why are we getting malt from Germany, when we grow pretty amazing malt-quality barley right here on the farm?” was the question asked, which, after a number of steps along the way, eventually led to a malt house.

“We certainly felt, and still do feel, that there is a need and a place for craft maltsters,” said Hamill.

“We can play around with different barley varieties and production methods,” he said, adding that the smaller scale also allows them to work closely with craft brewers “to make sure we’re giving them exactly what they’re looking for.”

Craft brewing also uses more barley to make the same amount of beer, said Hamill, noting craft beer may need three to seven times more barley compared to mass-produced beers, as brewers are not supplementing with corn, sugar or other adjuncts.

“The big maltsters make a great base malt, but we feel there is an opportunity to do some unique things and put our own twist on it,” said Hamill, adding that “seeing your product make it into beer that you can get at the local liquor store is a pretty amazing thing.”

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow Phil at @PhilFW on Twitter.

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