PRODUCTION

The planted area for 2015/16 crop season is forecast at one million hectares, while production is projected at 3.5 million tons, up from last year, but not nearly as high as 2013/14 level. Barley continues to be a good alternative for some farmers who want to plant winter crops but want to escape from the commercial difficulties that wheat faces. It has also the benefit that it is harvested approximately 2-3 weeks earlier than wheat, providing a significant advantage to those farmers in the more southern production area who want to plant second soybeans right after. Producers who were able to sell good quality barley under contracts in 2014/15 had good returns, much better than with wheat. Those who sold feed barley were able to sell under a much more fluid market than wheat. Production costs are lower than wheat and, at current prices, barley returns are positive, while those of wheat are negative. Barley does not have export quotas. Some producers in the central part of Argentina indicate that they will increase somewhat barley area combined with second soybeans. Barley production for the 2014/15 crop is lowered to 2.75 million tons, 250,000 tons lower than earlier expected due to area losses and lower yields in the South East Buenos Aires province (the main producing area) because of flooding.

CONSUMPTION

Argentine barley consumption for 2015/16 is projected at 1.5 million tons, unchanged from 2014/15. Domestic demand is stagnant, with little new investment and malting processors working at full capacity. Five malting plants have a total processing capacity of approximately 1.1 million tons. Argentina´s malting barley is destined for use in the local beer industry (three large companies) and for malt which is exported to several countries throughout South America, directly supplying beer manufacturers. Feed barley consumption is projected at 200,000 tons, similar to last year.

TRADE

Exports in crop 2015/16 are projected at 2.0 million tons, up 400,000 tons from USDA's estimate for the previous year as a result of an expected larger output. Roughly half of the exports are malting barley to regional markets such as Brazil, Uruguay, Colombia, and Chile, and eventually some to China. The other 50 percent of exports would be feed barley primarily to the Middle East. Exports in 2014/15 are down at 1.4 million tons as a result of a shorter crop than earlier expected. Local traders indicate that roughly 1.1 million tons would be malting barley to supply beer companies in South America and the balance feed barley. Barley exports normally take place during December-April each year due to logistical issues as the southern Buenos Aires port of Necochea becomes very busy in May-June shipping corn and soybeans.

STOCKS

Stocks by November 2016 are forecast to remain unchanged at 342,000 tons, a relatively low level. The local malting industry technically needs a level of stocks which ranges between 200,000-300,000 tons.

POLICY

The current policies that mostly affect grain production and trade are export tariffs and export quotas for wheat and corn. The export quota system known as the Registry of Export Operation, or ROE, was created in 2007 with the original objective of delinking high international prices from local food prices. The ROE system is currently applied primarily on wheat, corn and beef exports. By limiting exports and announcing export quotas without a given pattern, buyers for the domestic market and exporters do not compete for the product, making farmer prices artificially low. Export taxes provide price advantages for local processing industries and animal feed sector. Current export taxes are 23 percent for wheat, 20 percent for corn, 20 percent for barley and 5-10 percent for rice. These policies have reduced both corn and wheat production over the years in favor of soybean production, which is not affected by export quotas. The leading presidential candidates have all indicated that the agricultural sector needs to be reformed and have stated that they would eliminate the ROE and reduce or eliminate export taxes on grains, save for soybeans, upon taking office on December 2015

Barley

2013/2014

2014/2015

2015/2016

Market Begin Year

Dec 2013

Dec 2014

Dec 2015

Argentina

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Harvested

1,270

1,270

900

800

0

1,000

Beginning Stocks

333

333

592

492

0

342

Production

4,750

4,750

3,000

2,750

0

3,500

MY Imports

0

0

0

0

0

0

TY Imports

0

0

0

0

0

0

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

5,083

5,083

3,592

3,242

0

3,842

MY Exports

2,891

2,891

1,600

1,400

0

2,000

TY Exports

2,829

2,829

1,600

1,300

0

2,000

Feed and Residual

300

400

200

200

0

200

FSI Consumption

1,300

1,300

1,400

1,300

0

1,300

Total Consumption

1,600

1,700

1,600

1,500

0

1,500

Ending Stocks

592

492

392

342

0

342

Total Distribution

5,083

5,083

3,592

3,242

0

3,842

1000 HA, 1000 MT, MT/HA