In 2016/2017 the production and yield of barley reached record numbers, while Ukraine entered the top-3 list of world’s largest exporters of this crop. Nevertheless, due to low profitability, the scope of fields planted with barley decreases every year. Together with unfavorable weather conditions, it may result in a decrease of barley production in 2017/2018 by 6 million tons below the level of world’s consumption. As a result, the world stock of this crop may fall below 20 million tons.
Ukraine is among TOP-4 world’s largest producers of barley
Barley is the “third violin” of the Ukrainian crops production after corn and wheat. In 2016/2017 its production amounted to 9.9 million tons – which makes our country the 4th largest producer of barley in the world. Only Australia (13,4 million tons), Russia (17,5 million tons) and the EU (59,8 million tons) produce more. Canada, Turkey, USA, Argentina, Kazakhstan, and Iran are next on the list after us. 128 million tons of barley was produced last year globally. Usage of advanced Ukrainian breeds of winter and spring barley substantially increased yield as well as the competitiveness of the production.
The scope of land planted with barley decrease while the yield increases
During last 14 years, the number of fields planted with barley decreased twice: from 5,8 million hectares in 2003 to 2,9 million hectares in 2017. The main reason is the expansion of areas planted with corn, sunflower and soya beans. At the same time, during last 7 years, the yield of barley increased from 20 hundredweights to 34,4 per hectare, while before it remained at the same level for 15 years. Though, it’s still lower than in EU countries, where the yield amounts to 70 hundredweights per hectare.
Only EU and Australia export more barley than Ukraine
As the consumption of barley on the internal market was around 3,9 million tons per year, over half of the crop produced in 2016/2017 marketing year went for export – 5,3 million tons - 21% more than last year (4,4 million tons). This makes Ukraine 3rd largest exporter of barley in the world. This is a record export volume since 2009/2010 marketing year when we exported 6,23 million tons of barley. Largest importers of Ukrainian barley are Saudi Arabia ($316,5 million), Libya ($131,1 million), Jordan ($33,5 million), Algeria ($31,6 million) and Tunisia ($25,6 million). In general, barley export in 2016/2017 brought $747,3 million of profit to Ukrainian farmers and agricultural companies.
One of the crucial achievements is the increase of barley export to the EU market – from 227 thousand tons to 348 thousand tons, as well as the renewal of export to Turkey – Ukrainian producers exported 128 thousand tons there in 2016/2017 marketing year which is far more than 11 thousand tons in 2015/2016. In addition, Ukraine started exporting brewing barley (72 thousand tons) and organic barley (11,5 thousand tons) which is cultivated with the application of purely organic fertilizers.
Barley is the least profitable crop
In 2015/16 and 2016/2017 marketing year, key countries-producers of barley collected big harvests. This resulted in the largest global barley stock since 2009/2010 marketing year – 30,8 million tons.
Due to this, prices for fodder barley are far lower than prices for similar crops. At the same time, the cost of its production is higher in comparison with corn and wheat. As a result, the profitability of barley cultivation is around 30% - which is lower than that of corn and wheat.
Al the aforementioned explains why Ukrainian farmers continue to decrease the number of fields planted with barley. According to the Ministry of Agrarian Policy and Food of Ukraine, only 2,5 million hectares were planted with barley in 2017.
Decrease of areas planted with barley as well as bad weather will lead to the drastic decrease of production
A number of barley producing countries faced unfavorable weather conditions this year: the drought in Australia, North America, EU and Ukraine delayed the sowing campaign. Due to the cold weather in Russia, the harvest of winter and summer crops will be collected 1-2 weeks later than usual.
In such a way, because of the decrease of areas planted with crops as well as bad weather conditions in some countries the production of barley in 2017/2018 is expected to be 6 million tons lower than its global consumption. The US Agricultural Department foresees that the global stock of barley will fall below 20 million tons, which is the lowest amount since 1983/1984 marketing years.
It’s very likely that in 2017/2018 the market will face a deficit of barley. The high demand and low proposition will result in an increase of prices for future harvest of barley. As the global stock will decrease due to the need of satisfying the demand, it should be replenished in the future. That’s why it’s quite probable that prices for barley will remain high during the coming years.
