Summer 1995
Minnesota Barley Council Update
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Prairie Grains is the
official publication of
the Minnesota
Association of
Wheat Growers,
North Dakota Grain
Growers Association,
South Dakota Wheat,
Inc., and the
Minnesota Barley
Growers Association.
That includes the cargo preference law, according to the National Barley Growers Association. The federally-mandated law requires that a minimum amount of U.S. commodities sold through U.S. government-sponsored programs be shipped on U.S. flag vessels. Rates charged by U.S. ships can be two to four times that of the world shipping rate, putting U.S. ag commodities at a disadvantage.
"The time is right to cut cargo preference. If agriculture is to be subject to the budget ax, cargo preference should be dealt with in the same manner," says Dave Vilmo, president of the Minnesota Barley Growers Association (MBGA).
JAPAN RENEWS U.S. BARLEY IMPORTS -- Japan has dramatically increased its imports of U.S. barley. Between January and May 12, 1995, the Japanese Food Agency purchased 11.5 million bushels of barley from the United States, compared to zero last year.
The total includes about 321,000 bushels of waxy hull-less barley for use in specialty food applications. Demand for this specialty barley could reach 690,000 bushels this year.
Short supplies in Canada and drought-stricken Australia have strongly influenced Japan's buying interest in U.S. barley.
"We are working on having a longer-term, more consistent market relationship with Japan, rather than being an emergency supplier when their other sources fail," says Darren Coppock, administrator, Oregon Grains Commission.
TRANSPORT SUBSIDY END CONCERNS NBGA -- The Canadian government will terminate the Western Grain Transportation Act and its grain transportation subsidies on August 1, 1995. This has the NBGA concerned; a result may be more Canadian grain moving into the U.S. domestic market, and shipped through U.S. transportation routes such as the Mississippi River.
NBGA President Gerald Lacey says that the potential ramifications should receive more attention. So should differences in currency. He says the lower value of the Canadian dollar makes the U.S. barley market more attractive, and puts the value of U.S. barley at a disadvantage.
CROP INSURANCE COVERAGE SOUGHT-- The NBGA is working with the Federal Crop Insurance Corporation to establish a buy-up provision in federal crop insurance coverage for malting barley, beginning with the 1996 crop season.
"Discussions on this have slowed down because FCIC is tied up with regulating the new insurance program and dealing with delayed planting problems this spring," says Marv Zutz, executive director of the MBGA. "But we're very hopeful we can get malting barley coverage for next year."
He says a provision will try to be crafted that is actuarially sound and affordable to malting barley growers.
CHINA PROCESSES FIRST U.S. MALT BARLEY PURCHASE -- Gerald Lacey, NBGA president from Campbell, MN; Doyle Lentz, North Dakota Barley Council member from Mylo, ND; a maltster from Rahr Malting and a representative from Anheuser-Busch traveled to China this past spring to be on hand for processing of China's first ever purchase of U.S. malting barley.
The sale through Harvest States of 3.6 million bushels of Robust grown in the Red River Valley was made last December. The U.S. delegation provided China, familiar with two-rowed barley, technical assistance in processing six-rowed barley.
Lacey says China represents huge market potential for U.S. barley.
"Their beer consumption increased 35 percent over the previous year. Delivery trucks were waiting in line at production plants for over three days to pick up beer for distribution. Our goal is for our six-row barley to gain acceptance in China and to be a major supplier of barley in the expanding Chinese market," says Lacey.
An EEP allocation is being sought for the possibility of another U.S. barley sale, possibly one million bushels, by mid summer.