NEWS for North Dakotans
Agriculture Communication, North Dakota
State University
7 Morrill Hall, Fargo, ND 58105-5665
June 4, 1998
George Flaskerud, Extension Crops Economist
NDSU Extension Service
Increased feed use offset by reduced exports and increased carryover stocks were key features of the supply and demand report released by USDA on May 12 for new crop barley. The result is expected to be a lower barley price than during this past year, given normal growing conditions.
A seasonal average U.S. farm price for all barley of $1.90-$2.30 was projected by USDA for 1998-99. This is equivalent to prices in North Dakota of about $1.52-$1.84 for feed barley and $1.90-$2.30 for malting barley. The U.S. price averaged $2.35 last year for all barley.
Production is expected to increase from 374 million bushels in 1997 to 380 million this year, with the increase expected to come from a better yield. A 1960 to 1997 trend yield of 59.8 bushels per acre was used in the report versus the average yield last year of 58.3. Harvested acres are projected to remain steady.
The crop condition report released on June 1 generally supports USDA's projected production, although some production areas need rain soon. Sixty-five percent of the barley crop was rated good to excellent versus 68 percent the previous week and 77 percent last year. The current good to excellent ratings were 76 percent for North Dakota, 86 percent for South Dakota, 66 percent for Minnesota and 23 percent for Montana. Potential trouble spots exist for western North Dakota and eastern Montana. The ratings were particularly low for Montana. In addition, the Palmer Drought Index shows dryness in those areas, and the 30-day weather forecast shows continued dryness during June.
The same amount of barley is expected to be used during this marketing year as last, but the mix is expected to be different. Feed barley use is expected to increase by 50 million bushels, from 160 million to 210 million, but exports are expected to fall by the same amount, from 75 million bushels to 25 million.
Reduced exports are expected because of aggressive competition from the European Union. The EU is expected to capture a large portion of the increased world barley trade being projected by USDA. A 13-percent increase in world trade is expected primarily due to imports by Saudi Arabia and China.
Export sales to date for new crop barley are off to a slow start. As of May 21, new crop sales were only 30 percent of a year ago. Some increased sales may be forthcoming as a result of USDA Secretary Glickman's decision in late May to use the Export Enhancement Program to subsidize barley sales to Algeria, Cyprus and Norway, which are traditional EU customers. The subsidy would be on 30,000 metric tons which is the amount of barley the EU earlier subsidized into California. The 30,000 metric tons would be equivalent to about 1.4 million bushels of barley or about 5.6 percent of USDA's projected barley exports for 1998-99. The USDA has not yet indicated additional EEP initiatives.
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Source: George Flaskerud (701) 231-7377
Editor: Dean Hulse (701) 231-6136