Feed barley looks ‘good value’ at £20/t discount to wheat
© Tim Scrivener Curtailed demand for animal feed and little export interest is adding pressure to markets for feed barley and holding prices down.
Old-crop barley demand is lacklustre for both domestic and export markets, according to ADM Agri.
The latest UK cereal supply and demand estimates from the AHDB forecast that demand for barley for animal feed is 4% lower this crop year.
See also: Does wheat market recovery present opportunity to sell?
And, while human and industrial use for barley has been higher this year, as has demand from brewers, these increases have been offset by the reduction in feed demand.
AHDB cereals and oilseeds analyst Olivia Bonser said the drop in usage was in line with a reduced outlook for animal feed demand overall.
Total barley production for 2022-23 was up 6% which, combined with reduced demand, is expected to lead to larger end-of-season stocks.
Barley prices continue to track below wheat and are following wider global grain market trends, which are being influenced by large volumes of exports from the Black Sea region.
Spot prices collected by Farmers Weekly midweek averaged £167.60/t for feed barley, a £20.51/t discount to feed wheat.
Grain trader Cefetra said barley’s discount to wheat has widened due to a dearth of buyers, with very little consumer interest at present.
Looking forward, the outlook remains slightly bearish in the short term and it could provide a good-value alternative to feed wheat for livestock farmers.
Malting barley
There is a £45/t to £50/t premium for malting barley over feed barley, according to Frontier Agriculture, with malting barley trading at £220-£225/t ex-farm last week.