Barley Outlook IBMS Conference on Barley Production and Management for Profit

1. Barley OutlookIBMS Conference on Barley Production and Management for Profit  Dave HendersonPresidentNational Barley Growers Association

3. US All Barley Recent Planting Trends United States – All Barley Planted Acres 2006: 3,452,000 2007: 4,018,000 2008: 4,246,000 2009: 3,567,000

5. NBGA Member States All Barley Planted Acres

6. US All Barley Recent Production Trends United States 2006: 180,165,000 bushels 2007: 210,110,000 bushels 2008: 240,193,000 bushels 2009: 227,323,000 bushels Reasons for upward trend Depletion of stocks from 2003 – 2005 Good production years Higher corn prices Barley has been substituted for feed

8. NBGA Member States All Barley Production

9. Recent Barley Cash Prices Malt Barley Cash Price November 2006: $7.00 per cwt November 2007: $12.00 per cwt November 2008: $10.50 per cwt November 2009: $11.50 per cwt Feed Barley Cash Price November 2006: $7.00 per cwt November 2007: $10.50 per cwt November 2008: $6.80 per cwt November 2009: $6.75 per cwt

11. 2009 Barley Crop Quality by State Idaho - Overall yields very good, dryland yields exceptional; low proteins and low plumps Minnesota - Record yields; very high percent plump and acceptable protein levels; crop is somewhat stained and discolored Montana - Dryland yields from 40 to well over 80 bushels/A with plumps in high 90's and protein around 11.5; irrigated barley quality also good North Dakota- High plump, heavy test weights and low proteins; good yields anywhere from 70 to 90 bushels/A; late season crop issues include some mold and mildew and discoloration due to rain at harvest.

12. Market Factors World barley trade expected to increase by 6% to 19.3 MMT US exports projected to fall by 39% to .55 MMT,due to greater competition from Australia, Canada and Black Sea region. World barley consumption projected to increase 6% to 144 MMT, and US usage is expected to increase 18% to 5.2 MMT. World barley carryover stocks are estimated to jump 49% to 27 MMT, while US carryout is projected to decrease by 1% to 1.5 MMT.

13. Barley Contracts for 2010 Contracts available for both malt and, in some states, feed barley Contracts becoming more creative Key considerations for contracting Price Discount schedule Storage and delivery Act of God Clause

14. Malt Barley Contract Components Price Most pricing is tied to a company directed price formula Based on percentage of wheat futures market Other factors subjectively considered Price of other commodities Input costs Prices change on a daily basis Grower has option to lock in a price on fixed number of bushels

15. Malt Barley Contracts (cont’d) Storage payments Contract may require growers to store their production Storage payment range in the area of $0.04 per bushel per month

16. Malt Barley Contracts (cont’d) Production Most contracts production based Grower can sign contract to confirm fixed number of bushels at a given date Grower has some flexibility Some contracts require legal description of where acres are planted

17. Malt Barley Contracts (cont’d) Additional considerations: Local delivery Some malting companies work with local elevators - contact your local elevator to see if a program is available Discount schedule Evaluate for probability of achieving the top grade level Act of God clause Key consideration for growers and lenders

18. Feed Barley Contracts Feed barley contracts currently available in ND – other states working on establishing them Contracts typically for bushels Act of God clause is desirable

19. NBGA Issues Crop Insurance COMBO rollout expected 2011 Price derivation COMBO proposes a factor of 80.6% of the Chicago Board of Trade corn contract price for calculating Projected and Harvest Prices for barley NBGA resubmitted comments and data to RMA requesting this factor be established at 92% Future farm programs likely to focus more on risk management

20. NBGA Issues (cont’d) Crop Insurance New insurance policy for Specialty Type Barley will be available in 2010, for the following categories of barley: Waxy hulled food barley Waxy hulless food barley Hulless barley Malting barley Certified seed grown under production contracts, types 1-4 These specialty types of barley will be insured for overall production loss with the insured value based on actual production contract prices. (Malt Endorsement quality losses will not be covered) This new policy is the result of the Enhanced Price proposal submitted by the Idaho Barley Commission and National Barley Growers Association in July 2006. 

21. Specialty Type Barley Counties

22. NBGA Issues (cont’d) Research NIFA FY 2010 Special Barley Grants $471,000 Regional Barley Gene Mapping Project $547,000 Barley for Rural Development

23. NBGA Issues (cont’d) Trade Submitted comments in support of South Korea and Columbia Free Trade Agreements Signed letter asking for new compliance panel to update recent WTO ruling on the USDA GSM-102 export credit guarantee program Dan Kidd, NBGA director from MT, represented barley growers at Doha negotiation meeting in Geneva in early Dec.

24. NBGA Issues (cont’d) Climate Change Proposed Policy Statement NBGA will support federal climate change legislation that results in a net economic benefit to US barley producers based on comprehensive, science-based analysis.  NBGA does request that USDA conduct comprehensive, detailed scientific and economic analysis of that legislation or regulation prior to its implementation.  NBGA opposes any implementation of greenhouse gas legislation or regulation until other major carbon emitting countries agree to similar regulations and costs.

25. NBGA Issues (cont’d) Transportation S.2889 - Surface Transportation Board Reauthorization Act of 2009 approved in December by Senate Committee on Commerce, Science and Transportation Includes a number of needed reforms that will improve competitive conditions and transparency in the rail industry and provide improved mechanisms for challenging rail rates.

26. Summary Barley will continue to be a viable crop for many growers The National Barley Growers Association will continue to promote the importance of barley Questions?