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Growers study optimum barley market

Jan. 17, 2012, Airdrie, AB - For Western Canadian barley growers, achieving marketing choice is only the first step. The next is creating a robust marketing system, says Brian Otto, president of the Western Barley Growers Association (WBGA).

"With recent changes to the Canadian Wheat Board providing a 'catalyst for change' in barley marketing, the WBGA is exploring options and opportunities to re-focus and re-invigorate Western Canada's barley industry," Otto says.

Through its "In Search of the Optimal Marketing Structure" study, the WBGA has consulted with nearly 80 people (including a number in China and Japan) in all sectors of barley's domestic and export supply chains. The study is gathering information to put forward recommendations for the best commercial model for Western Canada's newly deregulated barley market place.

"We're seeing clear indications that a number of new opportunities for Canadian barley will emerge," says study co-author Russ Crawford of Agrinomics I. T. Consulting in Calgary. These opportunities, he adds, are important to revitalizing the crop, which has steadily declined in acreage, production and, most importantly, profitability in the past decade.

While malting barley delivers returns comparable to crops such as canola and spring wheat, the majority of barley grown is typically sold for livestock feed. The feed market has seen declining domestic consumption and increased competition from grain corn and corn and wheat DDGs (dried distillers' grains, a byproduct of ethanol) from Western Canada and the United States.

The study is finding Western Canada has a number of unmatched strengths in barley. For example, its production, storage and handling infrastructure is second to none, and it is one of the world's best producers of high-quality barley.

In addition, Western Canadian producers could capitalize on the demand for mid-range quality malting barley and high-quality feed barley.

"In order to capture and sustain new opportunities, a highly responsive and efficient marketing system is needed," Crawford says.

The WBGA is currently vetting a number of recommendations with industry stakeholders. Final study findings and recommendations will be released at the WBGA's 35th annual conference, Feb. 15 to 17, 2012, in Calgary; visit WBGA.org for details.

The WBGA's "In Search of the Optimal Marketing Structure" study is funded by the Government of Canada's Canadian Agricultural Adaptation Program (CAAP) as well as Big Rock Brewery, Rahr Malting Canada Ltd., the Alberta Barley Commission and the WBGA.

January 17, 2012  By CNW Group Ltd.