Declining beer consumption due to the COVID-19 pandemic will also lead to reduced demand for the malt barley to brew it — but acreage to the crop is unlikely to see much adjustment on the Prairies.
“I don’t think there’s any question — without sporting events, and festivals, and concerts – that beer consumption will go down,” said Peter Watts, managing director of the Canadian Malting Barley Technical Centre.
While domestic retail beer sales were reportedly up, that business wasn’t enough to compensate for lost demand elsewhere, he said.
As a result, Watts expected to see a fairly significant drop in overall beer consumption this year.
“There’s no question that Canadian malting companies are seeing reduced demand from the U.S., given the situation,” said Watts. That will translate to lower demand from the domestic malting industry for barley.
However, while there may be a small shift out of seeding malting barley, he didn’t expect to see a large reduction in overall barley acres in Western Canada.
“Producers have had reasonably positive experiences with barley in recent years,” Watts said, adding, “I think we’ll see a drop in acres from last year, but I don’t think it will be significant.”
While malt barley prices may be under pressure, he pointed out that feed barley has shown some strength.
Also, “China seems to have been able to get their brewing industry back up and running,” he said, “so we expect reasonably good demand from China, which is a big market for malting barley.”
A Chinese levy on Australian barley imports will also inevitably drive some demand to Canada, though Watts cautioned there were still concerns that any Chinese retaliation against Canada over the Meng Wanzhou situation could spill into barley.
Statistics Canada currently forecasts farmers in the country will seed 7.25 million acres of barley in 2020, which would be down slightly from the 7.402 million acres planted the previous year, but still the third-largest acreage base of the past decade.
Updated acreage estimates will be released at the end of June.