Canada’s barley – both for malt and feed – is in increasing demand.
China traditionally receives the bulk of its barley from Australia, but the two countries are in a trade dispute.
Tom Steve, general manager of the Alberta Wheat and Barley Commission, said China is imposing an 80 per cent tariff on Australian barley and that significantly reduces the amount of product that’s going to be imported to China from Down Under.
That results in a short-term benefit for Canadian barley, and more specifically, barley grown in Alberta and central Alberta, because Australian barley will not be competitive enough due to the tariffs, explained Steve.
Prior to the dispute, Australia’s extended drought had also been benefiting Canada’s barley industry.
“We’ve been increasing our export (of barley) to China from Canada for about three years,” said Steve, adding about 1.5 million tonnes a year go to China – a combination of malt for beer production and feed for livestock.
“Now, the challenge for us is to maintain that market advantage.
“Because if the tariffs come off, or if Australia has a better growing season and better crops, they’re a significant competitor.”
Red Deer area is a prime spot for producing barley, said Steve, because of its moderate summer temperatures and cooler nights.
“It’s more conducive to growing barley compared to other areas, such as in southern Alberta, where it’s hotter and there’s not as much rainfall,” Steve explained.
Sustaining the exports to China long term involves building relationships and confidence through direct contact to sell them on the quality of barley produced in Canada and how it’ll work in their beer production, he said.
The demand for barley in the Chinese market comes at a time when there’s less demand in North America due to COVID-19.
“The good news is the Chinese market is offsetting some of the downturn we’ve seen in demand for malting barley in Alberta,” said Steve. “It’s a mixed bag.”
Wade McAllister, co-owner at Antler Valley Farm, about 15 minutes south of Red Deer, said the shutdown of sporting events due to the pandemic is hurting the industry.
“Most of our beer is consumed at football games, hockey games, basketball games, baseball games, concerts, that’s where a lot of beer is consumed in North America.
“You think of how many kegs of beer are consumed at sporting games, and that’s where it’s hurting us,” said McAllister, who is also vice-chair at Alberta Barley.
He said the opening up of the China market is welcome news for farmers, but many variables will have to align for shipments to get there.
“It’s great news for us, but we need to keep this up, show them we have good product and we are consistent, so it’s the rails, it’s the boats,” said McAllister. “Everybody has to be on board for this to happen (in the long term).”
Sylvan Lake area farmer Mike Ammeter, who grows, wheat, barley and canola, said Canada is on the winning side this time around.
“We’ve dealt with issues around canola and China, and I’m sure there are countries taking our misfortune, and that becomes their fortune, so this time, maybe we’re on the winning side. It’s the world of global trade.”