PROXIMITY MALT’s Crop 2020 Mid-Term Malting Barley Summary:

COVID-19 has had surprisingly little impact on grain crops’ production or consumption worldwide– including barley–yet. USDA, FAO and other global institutions report stable numbers through June, reflecting a fairly typical year in which combined global wheat/corn/barley production will likely slightly exceed consumption, resulting in a bearish market and an uptick in carryover stocks.

Proximity Malt sources barley from growing regions close to its two facilities:

In Colorado, we contract with local growers in the San Luis Valley to produce spring two row barley (primarily Genie). The crop is currently in the filling stage, and harvest is expected to begin around mid to late July.  We are also experimenting with winter two row varieties, similar to those in Delaware, in areas such as eastern Colorado and North Texas with hopes to introduce their benefits to brewers in future years.

Our Delaware malthouse works closely with growers throughout the tri-state, Delmarva area to produce premium two row winter malting barley, primarily Violetta. The 2020 winter barley harvest is now complete, and both quality and yield are above average – with typical proteins running between 9.5-11%

In European malting barley regions, growers experienced plenty of weather variability so far this season, and the next 4-6 weeks are key. E-Malt reports that adverse weather has already impacted yield and quality in both France and Ukraine, and they’ve downgraded their barley crop estimates by 10% and 7% respectively. The overall EU supply is forecasted to re-balance with reasonable crops expected (both yield and quality) in the UK, Germany, Spain and Scandinavian region.

The Euro has strengthened against the US dollar, offsetting the slight drop in European malting barley and subsequent malt prices highlighting the inherent international currency risk of imported malts.

Argentina’s crop is off to a good start, but is still in the very early stages of the production cycle.

Stats Canada released an updated report estimating final planting to be up just slightly from last year. Rain has provided needed coverage for barley and wheat crops, and so far, the crop is progressing normally. As always, with the Canadian harvest still over a month away, is at risk of extreme weather events such as hail and frost.  RMI estimates this year’s Canadian crop to be about 10 million MT in line with the globally comfortable supply/demand ratio.

In the dominant US growing region (North Dakota, Montana, Idaho, Wyoming), crop conditions are overall good, and harvest is slated to begin around 3^rd week of July. AMBA reports that harvested acres were up slightly, offsetting a small drop in yields, with no dramatic changes in any of the major barley producing states. RMI estimates the US crop to be up slightly from 2019 – from 3.7 MMT to 3.9 MMT this year.

Summary:

Global impacts of COVID-19 on the delivery of malt appear to be benign so far; and given the global outlook for malting barley, and the forecast for an average supply of North America malting barley crop, we don’t anticipate dramatic swings in malt prices over the next six months.  Until the spring barley crop is in the bins, however, there remains price uncertainty for 2021.  What is also not quantified has been the dynamic relationship between the pandemic, global trade and consumer consumption- current events’ impact on 2021 global pricing trends is largely unknown.