Barley Market Report: StatsCan Shows Lower December 31st Barley Stocks for 2024
In February StatsCan gave estimates for Canadian grain stocks as of December 31st. While this release is not anticipated the way acreage and production reports typically are, it is useful for assessing and recalibrating supply and demand figures for the year.
StatsCan reported barley stocks as of December 31st at 4.96 mln tonnes, 504,000 tonnes (9%) lower than in 2023 and the third smallest in over 20 years. However, this is also only 2% below the 5-year average, so supplies are not excessively tight. The breakdown showed 324,400 tonnes of commercial inventory and 4.63 mln tonnes sitting on-farm. It should be noted the total supply for the 2024/25 season is down nearly 300,000 tonnes due to smaller production last summer (8.14 mln tonnes, compared to 8.91 mln tonnes in 2023), which is the main reason for the lower stocks.
StatsCan reported total August to December usage at 4.40 mln tonnes, up modestly from 2023 but the second lowest since 2018. They showed grain exports at 1.20 mln tonnes, 36% more than in 2023 but less than in the previous three years. Product exports were reported at 277,600 tonnes, the lowest since 2004, and a reflection of some slowing in malt demand.
Feeding is by far the largest source of usage, pegged at 2.88 mln tonnes, 3% less than last year and the lowest in five years aside from the 2021/22 season. The Feed/Waste/Dockage category is somewhat of a ‘catch all’ category to make the rest of the numbers in the supply and disposition table balance, so the figure needs to be taken somewhat with a grain of salt. However, lower feed usage is consistent with lower cattle numbers and better pasture conditions last summer.
Ordinarily, the overall demand trends for most crops are fairly well entrenched at this point in the calendar. However, the ongoing risk of US import tariffs is creating more uncertainty than usual for usage through the final months of the 2024/25 marketing year. At the time of writing, import tariffs against Canada seem imminent, although the situation can change almost by the hour.
Barley is better positioned than some other crops to weather US import tariffs. As affirmed by StatsCan, domestic feeding is by far the largest portion of demand, reducing the importance of export markets. And of the 1.20 mln tonnes of grain exports through the first 5 months of the crop year, less than 10% went to the US. Malt exports are more reliant on the US than grain, but the overall US share of total Canadian barley demand is relatively small, even if it’s still an important market.
As much as grain markets are at the mercy of policy decisions made in other countries, barley ending stocks are forecast to be tight at the end of the 2024/25 marketing year, potentially down to 800,000 tonnes or less. The fact barley prices have been working higher in the face of the uncertainty affirms supplies will be drawn down going into the next harvest. This puts more attention on 2025 acres and weather during the coming season, regardless of how things unfold with the US.
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