Rail car shortage has strangulation hold on barley marketing
The vast backlog of rail cars has forced those grain handlers dealing in malting barley contracts to focus on moving their contracted bushels, and as a result pretty much suspended any open market malting barley action.
“We are 1,700 cars behind on rail cars,” said Kayla Burkhart, a grain broker for Sun Prairie Grain in Minot, N.D. “We are concentrating so much on getting our contracted malt barley moved that we aren’t buying any open market barley at this time. Prices have been pretty stagnant, even with the slight upturn in the other grains. It’s been pretty quiet on the malt barley front.”
Many of the elevators have turned to trucks to ship contracted malting barley, but aren’t able to move the volume needed to clean out the 2013 crop in an orderly fashion.
And, according to Burkhart, some of the malting locations have come close to having to scale back operations due to a lack of malting barley supplies and had to rely on truck shipments to keep them running. As a result, truck freight is getting hard to find.
And although the railroads say the situation is going to get better, at least in the case of Sun Prairie Grain, which is on the Canadian Pacific line, it actually has gotten worse every month, Burkhart noted.
“Our oldest single car orders now go back to Nov. 5 right now,” she said. “They are a little bit better with unit train shipments, but we don’t have the capacity to ship unit trains from any of our malting barley facilities and most of the maltsters aren’t able to handle a unit train on their end. Instead, we need to rely on single car orders, and every single car order that we get goes to barley.”
The situation has been frustrating for growers as well.
“They really want to get their barley hauled in, and we would like to see them be able to do that,” Burkhart said. “But that’s pretty tough to do right now when you don’t have any place to put it.”
Feed barley movement is also very limited, but in this case it’s the lack of any U.S. export news that’s keeping a lid on prices.
In the latest USDA Feed Outlook Report issued on March 12, it was projected that global barley trade for the current marketing year will increase 0.5 million tons from what was estimated last month to 20.7 million. Australia, with increased production, is forecast to ship 5.5 million tons of barley, up 0.5 million this month. That will make Australia the world’s largest feed barley exporter this year, pulling ahead of the European Union.
Import projections are increased this month for China, up 0.3 million tons to 2.8 million; Algeria, up 0.1 million to 0.5 million; Turkey, up 0.1 million tons to 0.2 million; and Morocco, up slightly.
Despite the lack of any fresh export news from USDA, the Feed Outlook Report did raise the U.S. barley farm price range by a dime on the low end resulting in a 5-cent increase in the projected midpoint to $6.10 per bushels. USDA said the increase in the forecast all barley price resulted from recently higher prices reported for feed barley.
Elevator spot cash prices at local elevators averaged around $3.20 a bushel for feed barley and the average offering price for malting barley was $4.25 a bushel, but very little trade was noted for both classes.