Barley

Barley is the common name for any of a genus of cereal grass and is native to Asia and Ethiopia. Barley is an ancient crop and was grown by the Egyptians, Greek, Romans and Chinese. Barley is now the world’s fourth largest grain crop, after wheat, rice, and corn. Barley is planted in the spring in most of Europe, Canada and the United States. The U.S. barley crop year begins June 1. It is planted in the autumn in parts of California, Arizona and along the Mediterranean Sea. Barley is hardy and drought resistant and can be grown on marginal cropland. Salt-resistant strains are being developed for use in coastal regions. Barley grain, along with hay, straw, and several by-products are used for animal feed. Barley is used for malt beverages and in cooking. Barley, like other cereals, contains a large proportion of carbohydrate (67%) and protein (12.8%). Barley futures are traded on the Winnipeg Commodity Exchange (WCE), the London International Financial Futures and Options Exchange (LIFFE) and the Budapest Commodity Exchange.

Prices – Barley prices on the Winnipeg nearest futures chart started out 2003 in the CD per metric ton area, fell sharply by about 38% to the year’s low of CD in July, and then recovered slightly to close the year at CD per metric ton.

Supply – World barley production in 2002/3 fell to 132.791 million metric tons, down from 141.788 million in 2001/2. World production is expected to recover in 2003/4 to 139.652 million metric tons. The EU is by far the world’s largest producer of barley with 48.023 million metric tons in 2002/3, accounting for 36% of world production, followed by Russia at 18.700 million (14%), and the Ukraine at 10.350 million (8%). US production in 2002/3 fell to a record low of 4.933 million metric tons (only 3.7% of world production) from 5.430 million in 2001/2 but is expected to expand sharply to 6.011 million in 2003/4 (USDA). US planted acreage for barley has shown a steady contraction, averaging around 5 million acres in recent years versus 7 million in the mid-1990s. North Dakota and Montana are the largest producing states.

Demand – U.S. total barley use in 2003/4 is expected to increase to 283.0 million bushels from the post-war record low of 269.0 million in 2002/3. Seed use has run at about 8.0 million bushels in the past several years, feed & residual use is expected to rise to 85.0 million in 2003/4 from 65.0 million in 2002/3, and demand for use in food and alcohol beverages remains steady at 164.0 million bushels.

Trade – World trade in barley fell to 16.663 million metric tons from 17.231 million in 2001/2 and is expected to remain lower at 15.625 million in 2003/4. The European Union is the largest exporter with at least a third of the total, with Russia, the Ukraine, and Australia exporting much of the balance. Importing countries are many, with Saudi Arabia being the largest importer.