Here’s a point of reference (and the reason we haven’t grown malt barley on our farm for the last 5 years).
That’s Wednesday’s closing market price for malt and feed barley at the nearest grain elevator to our farm. The prices are quoted per hundred pounds (abbreviated cwt). So, malt, per pound, is $0.0775. Note that feed barley is only $0.75/cwt less than malt. The “N/D” column indicates November/December delivery. The next column to the right (not in the picture) is empty, so no set price beyond next month.
The standard “test weight” (the assumed weight per bushel for purposes of trade) for barley is 48 lbs. So, a cwt of barley contains 2.08 bushels. $7.75 / 2.08 = $3.73 / bushel. Spring wheat, our principal crop is currently $10.00 / bushel (wheat is traded by the bushel; don’t ask). In an average year we can produce around 40 bushels of wheat per acre; at current prices that’s $400 / acre. Barley will average closer to 60 bushels / acre, but at $3.73 / bushel that’s only $223 / acre. Production costs are similar for both crops. One doesn’t need to be a Nobel-worthy economist to figure that one out.
Current malt prices, at the HB level, for base malts are anywhere from $1.50-2.00 / lb. So, retail malt prices are close to 20X what the grower receives. Transportation, storage, processing, packaging, more storage, more transportation, more storage, and, finally, more transportation before that sack of malt arrives at your door. There’s a lot of middlemen in the supply chain.
Edited to correct the price/lb of malt. Left out a “0”.