Production down58 % yoy
Prices up43 %
Barley markets experienced a reversal of fortune off the back of record production and depressed prices in 2016–17. Yields deteriorated and production declined as a result of unfavourable weather conditions, but escalating domestic and global livestock feed demand saw barley prices skyrocket, rivalling premium wheat prices by early 2018.
Output was down 40% year-on-year, mainly attributable to the dramatic fall in production.
The memory of the low prices experienced in 2016–17 saw many farmers seek out other cereal crop options, which resulted in a decline in the area planted to barley.
This, combined with a sharp reduction in average yield, intensified the fall in production, down 58% to 1.19 million tonnes1.
The decrease in area planted combined with the strength of domestic livestock markets resulted in the average feed indicator price rising 43% year-on-year4.
The dry conditions amplified feed demand and created a domestic deficit situation where lot feeders and grain traders competed for declining stocks.
Prices skyrocketed accordingly. Such was demand that feed barley (F1) was trading close to Australian Prime White (APW) wheat levels by the end of the summer.
Prices trended upwards throughout the year, escalating in April as the prospects of an autumn rain break faded, and continued to rise despite global prices weakening towards the final quarter of the year81.
Hunger from export destinations supported the domestic price, with competition strong between export and domestic markets80. Domestic end users were forced to purchase barley from further afield, maintaining upward pressure on prices and resulting in strong premiums compared with imports40.
National exports were down 6% as a result of lower domestic production.
China continued to take the bulk of Australian barley (65%)
and was the most valuable export market despite the exported quantity falling by 19% year-on-year54. Exports are reported here at a national level as state-level data and some destination data is restricted 17, j.
The global balance sheet for barley was tight, with global consumption believed to exceed production by 3.2 million tonnes4.
Global stocks were at their lowest level in 30 years, estimated to have fallen to 19 million tonnes96.
Global production fell by 2% and consumption by 1%. Globally, lower production, higher prices and competition from other feed grain substitutes were the main reasons for the fall in consumption4.