I don't know what it is like where you are, but here in the rainy eastern end of the Great Lakes it's the year of the bumper crop, with Ontario's wheat crop set to be a record. That got me thinking about last spring's talk about price increases for brewers. Here are some stories harvested from around the world on the summer's beer ingredient:
- In July, it was reported that Coors set base price for malting barley in Montana and Wyoming at at $11.50 for 100 pounds, a $4 increase over last year's price. But by a week later on August 1, average prices for barley were dropping in North Dakota due to the failure to reach the required malting barley standards - just like in Hungary as it happens. US malting barley prices were also lower for the most part, with prices ranging from $5.25 to $6.25 a bushel. Price changes ranged from steady to down 55 cents a bushel.
- Today, the Canadian Wheat Board reports that "the latest malt barley outlook is down 15 dollars a tonne from the July 24th price forecast. The board says there is significant price volatility as harvest progresses in the northern hemisphere. Although there's still a long way to go before harvest is over, a large and generally good quality European crop has weakened prices." Another source states that select CW two-row is projected at $345 per tonne ($7.51/bu), down from $360/$7.84 last month. I am not sure if a Canadian bushel is more in volume than a US one (like our gallons) but if not it would appear that Canadian malting barley is priced higher by at least a buck.
- Europe has also had a bumper crop with malting barley prices seeing a fall - one of the best harvests in recent history has pulled premiums in the EU down from a peak of around £70/tonne to £12-25/tonne, dependent on variety. And, as this Irish report notes, costs of production are still up.
- Lastly, on the other side of the world, rain in parched Australia has raised expectations for the 2008-09 barley crop.
So, just on an ad hoc survey of the farming press, it appears that there's lots of supply leading to malt barley prices dipping mid-summer but nothing catastrophic as the northern hemisphere's harvest rolls in. It was interesting to note the other day that even if the Canadian economy might be entering a bit of a stall, that agricultural jobs had increased by over 6,000 - the last time that happened was around 1784. Sounds like a change in costs to brewers and consumers might in the offing but it's still only August and there's plenty more in the mix than just the price farmers get for their malting barley.