Malt Barley?

[charliep]

Are any of the maltsters/grain companies through programs like cash plus offering programs that would encourage carryover of old crop into the 2009/10 crop year?

I note the comments about the general high quality of the 2008 crop and the various concerns over time about selection processes/contracts. Given weather to date, not looking good for the selectability of the 2009 crop (things can change). If I was maltster, I would want book a fair chunk of old crop inventory (realizing germination risk in these supplies).

Are there any programs being offered? Have the various players in the malt barley industry been approaching you? Are the CWB programs reflecting the new realities?

[Burbert]

Charlie, Farmers live in the real world out here. Malties asking farmers for something, dream on! Nope nobody is approaching anyone, it will never happen. The cheating and fraud that goes on in the grain market, will always mean that farmers are price takers, not price makers, duh!

[charliep]

Actually appreciate your Burbert.

I recognize some of the frustration with maltsters with the caveat there are multiple buyers (or perhaps more accurately buyers from the CWB and contracts of delivery from farmers) and there is often another side to any complaint (i.e. a good maltster works with farmer clients to meet both parties needs).

Having said that, I will note malt barley has consistently been one of the most profitable crops for anyone who can consistently achieve malt barley grade standards and has a good supply/value chain relationship with a maltster.

Working backwards from the needs side, there is 1 million tonnes of malt capacity in Canada (most in west). About 200,000 of malt product is used by domestic brewers - this number is actually declining as the domestic brewing buys malt outside Canada. The other 800,000 tonnes is exported as malt product.

My biggest fear is that western Canada will not have enough high quality to supply malsters with one solution of importing malt barley or worst, shutting down a malt plant.

Even bigger frustration is the note that western Canada has come a year of an extremely high quality malt crop with reduced volume contracts/price signals which could best be described as confusing and are now headed into potential shortage (realizing only the middle of June) with no price signals and no plan. My two bits.

[Choice2U]

Burbert...why don't you and all the CWB supporters suggest that the CWB handle absolutely everything. The grading, the storage, the delivery, the risk on storage, the risk with the malster, the acreage that you would be allowed to grow, etc. Wouldn't this be a better world for you. You could just grow the stuff and then let someone else do everything else. They can tell you when to deliver. They could tell you how much to deliver. They could regulate how many acres you could grow. They could make you all the money. No risk and a huge premium. In my better world, I would suggest that the CWB get the hell out of my way and let me handle every aspect. I'm sure you would win because the malsters would rather deal with the CWB.

[Burbert]

GEE GOLLY GOSH Choice, when kin I expect dis CWB stuff to happin, that u outlined. Gess i be rich, rich, rich soon. Tanks for the confeedence yor showen in me. Duh, Don't tink it'll happen even though a smart fella like u recommends it !!!

[Hopperbin]

From Charliep "Even bigger frustration is the note that western Canada has come a year of an extremely high quality malt crop with reduced volume contracts/price signals which could best be described as confusing and are now headed into potential shortage (realizing only the middle of June) with no price signals and no plan. My two bits. "
It is good somebody brings this issue up and has anyone drove through Kindersley Rosetown lately where a lot of malt barley comes from? Our frozen barley fields here where I am are very questionable, we also grow a lot of malt in the area, if I had barley planted I don't think I would be selling any of it at the moment. Wait and see would be my thinking.
Interesting to note no one is commenting on the malt contracts. I take that the CWB program is dead or not working.

[charliep]

Burbert

Just curious if you grew malt barley this past year? Because if you didn't, the
discussion would kinda like one with someone who complains about never
winning a lottery but never buys a ticket. Are you in the game or just a
mouth piece?

If you are in the game, what suggestions would you have to improve the
current system of contracts around malt barley. I don't think I had any
suggestions other than the importance of the malting industry (domestic and
export which represents 1.8 to 2.4 mln tonnes of barley business in total) to
western Canada and the need to improve market signals in what will likely be
difficult times for all members of the supply chain in the coming year.

But again maybe you disagree and assume western Canadian farmers can
walk away from this business/not suffer any long term harm.

[dmlfarmer]

Charlie, your comments to Burbert are extremely unfair.
Charlie wrote "If you are in the game, what suggestions would you have to improve the current system of contracts around malt barley"
Do you actually feel only growers of malt barley should be are allowed to comment on malt contracts?
If so, do you also believe only actual growers of board grains should be commenting on the CWB. There are a number of regular posters on this site who do not grow any CWB grains yet regularly express their anti board views!
The Alberta government does not grow board grains yet is very vocal in their position on the board - are you opposed to the government taking a position?
I thought this was an open forum and everyone could comment on anything.
BTW, I grew malt barley last year. How much did you grow Charlie? Were you in the game or are you too just a mouth piece?

[charliep]

The answer question is yes. A malt barley contract should ultimately be
between a buyer and a seller which is the case even today with the
exception of the price/payment side. What is needed in these contracts is
standardized terms which are easy to understand and enforceable on both
the buyer and seller side. Why someone would care what is in this contract
who doesn't grow malt barley?

Why does the Alberta government care about barley and the CWB? 50 % of
the 1 million tonnes of domestic malting barley is in Alberta and their ability
to source supplies is important. 50 % of the barley in Canada is also grown
in Alberta and fed livestock here. Someone questioned governments role in
pricing on the beef side (actually not quite) and the answer is likely none.
Perhaps governments role should be to ensure there is a transparent and
accurate mechanism for transmitting price signals so that buyers and sellers
can make good decisions.

So to the original question. What is malt barley worth today? Old and new
crop?

[charliep]

The answer by the way is likely in the $4 to $4.50/bu range cash plus
contract (2 row/AB) - southern Alta. feed barley prices are in the mid
point of this range today. Conditions look excellent in Europe for a large
high quality malt crop. Australia is not as far advanced and not perfect
but there is optimism there as well. North America is the malt barley
problem area and your best signal is to watch US values/compare to the
CWB cashplus.

Perhaps to add to the confusion, have far ahead are the domestic
maltsters booked? How much is cash plus (visible to farmers) and how
much direct sales to the pool/what value? When you look at the
2009/10 pool return, what size sales program is the CWB and what
percentage is priced?

[Burbert]

Charlie P. I am in the malt barley game, sitting on old crop, cause my friends at Car--l lost my submitted samples last Fall, hence our grain wasn't selected. Resubmitted samples in Dec, met with comments, such way too much grain in the world, nobody wants or needs malt barley. Malties are backing out of contracts, refusing to honour signed contract. Cash Plus is the only way to go, contact a Maltie yourself, make them happy, buy them a jug, maybe they'll take your grain. Perhaps, that should be written into Malt contracts, kickbacks and booze always make for good friends, fine print of course, or invisible ink would work even better. Yup, thats the new way of doing business.
Charlie, question, for you. Do you think that I'm PO'ed or just a crack pot? Reality check, most contracts aren't worth the paper, they are written on!!!!!!!!!!!!!!! Only recourse is to sue the living s--t out of the parties involved, but a course farmers, will never ever do that...

[charliep]

Others have made the same point you have over the winter. Western Canada is headed into a whole new situation starting this fall.

Other than complaining what is the solution?

Actually agree with both you and dmlfarmer the CWB is not the issue here except as relates to price signals. The CWB has zero responsibility for grading and contract enforcement except for as applies their contracts (which by the way have the same terms as a typical grain company contract).

In the menage a trois that appears to best describe the malt barley situation, what needs to be done? What is the CWB role in this relationship?

[LWeber]

Just curious:

When is the last time anyone has ever had a drink in a grain elevator or grain terminal?

[ianben]

Here in UK we have a three year contract with Coors to supply with malt barley.

This is a new deal just starting this harvest special terms and supposed farmer friendly terms including farmer assured ie will take sample on farm and not test on delivery. We will see how it goes.

Main thing Coors get is an advertising campaign which focuses on the fact their beer is produced useing 100% British barley. Their aim is to get our flag on the can for the 2012 olympics Budget of £10,000,000 for this.

[Hopperbin]

Interesting Ianbin. Hope you can stay in touch and answer some questions about how your malt contract works? Can you give any price details? Speck details? What if it don't meet speck then what happens? Do you take a pre determined discount or a discount decided later upon delivery? does your malt price change over the 3 year period? How are your delivery dates decided? Anything like more money for less protien for example? You could provide some valuable information here, I promise the CWB won't but into your business, hehe.