Message from supplier: Grain prices to rise in December.

**Austinhomebrew** · 11-24-2010, 04:58 PM

According to a supplier: Grain prices will go up starting in December.

1. North American planted acres are down by 20% as brewer's grade barley continues to evolve into a "specialty" crop in relation to corn, soybeans and wheat.

2. In Canada, where the weather turned cold and rainy at the least optimal time (during planting and harvesting), the crop has come off short in terms of supply and may present some brewing challenges.

3. In Europe, demand will greatly outstrip the availableamount of barley from this year's crop.

This will result in a 10-20% increase starting in December.

Keeping you posted.
Forrest

**jeffjm** · 11-24-2010, 05:23 PM

Dang, just as the hop situation is getting better. Time to buy a couple of 50# sacks, I guess.

**509inc** · 11-24-2010, 05:31 PM

Thanks for the update.

**Walker** · 11-24-2010, 07:24 PM

Quote:

Originally Posted by Austinhomebrew

1. North American planted acres are down by 20% as brewer's grade barley continues to evolve into a "specialty" crop in relation to corn, soybeans and wheat.

Weird.....

Quote:

From August 11, 2010
http://www.farmandranchguide.com/articles/2010/08/12/ag_news/markets/market13.txt

The USDA World Agricultural Supply and Demand Estimate (WASDE) projections released in July indicate a significant level of barley inventory remaining in the U.S., Edwardson noted. Projections for beginning stocks for the 2010-2011 marketing year are estimated at 115 million bushels, an increase of 29 percent from the 89 million bushels for the 2009-2010 period.

Meanwhile, delivery for malt barley under contract will continue to be spread throughout the coming months. Production that is not under contract will be difficult to market due to surplus quantities and the sluggish export demand.

Given that data, I can see why the farmer's would pant less of it (supply exceeded demand), but don't see why the prices would be going up (supply will be curtailed to meet demand).

If anything, I would expect the prices right now to be falling. And this does seem to be the case, at least in Montana. According to the USDA, prices fell almost every single month in 2010.

http://www.nass.usda.gov/Statistics_by_State/Montana/Publications/economic/prices/barmltpr.htm

I wonder if the malting houses are spinning things and raising their prices unfairly or something.

**Pappers_** · 11-24-2010, 07:26 PM

Thanks for the heads up, Forrest.

**riverfrontbrewer** · 11-24-2010, 07:36 PM

Interesting data Walker...but I would add to the end of your comment that it's not "unfair" if people keep paying the prices that being charged. That would just be the new market price for malted barley.

**Walker** · 11-24-2010, 07:41 PM

Quote:

Originally Posted by riverfrontbrewer

Interesting data Walker...but I would add to the end of your comment that it's not "unfair" if people keep paying the prices that being charged. That would just be the new market price for malted barley.

It all depends. If the malting houses are talking to each other and setting prices based on an agreement between themselves, it's called collusion and is illegal.

I do agree that raising prices for your own company's product(s) until you find the right volume vs price ratio that maxes your profits is just smart business, but if supply exceeds demand, yet all malting houses raise prices... then something smells fishy.

**AZ_IPA** · 11-24-2010, 07:50 PM

Quote:

Originally Posted by Walker

It all depends. If the malting houses are talking to each other and setting prices based on an agreement between themselves, it's called collusion and is illegal.

Kinda like craft breweries allegedly do?

I wonder if we'll see the same thing with grain that we did with hops. A huge increase in price for ~1 year, followed by a huge surplus which then caused prices to drop substantially.

**riverfrontbrewer** · 11-24-2010, 07:54 PM

This will be my last post in this AHS advertising thread as he pays good advertising dollars

to be a vendor on this site. Buuuut, I would agree that collusion is illegal, though many industries will raise the prices of their products and/or services all at once and nobody balks....airlines anyone?

**Austinhomebrew** · 11-24-2010, 07:56 PM

The suppliers are passing on a price increase from the malsters. The people that make the grain sell it to a wholsaler who sells it to a store who sells it to the end user.

Forrest