Just outside the village of Gesto, the Byrne Craft Malthouse produces brewery grains from winter and spring barley grown on the family’s farm. Malt refers to grain that has been partially germinated to convert starches to sugars. Barley is the most common malted grain, with two-row barley – varieties featuring two kernel rows – being much preferred by most brewers.

Malt barley agronomy

“I grow two-row barley. We looked at six-row, but the brewers won’t touch it,” Byrne says, while inspecting his overwintered crop on a damp day in early March 2026. Newdale is Byrne’s spring barley variety of choice, while his winter variety is Calypso. The latter consistently outperforms the former in yields.

In total, the family farms five acres of spring barley and 10 acres of winter barley each year – a small acreage, but more than enough for their production facility to process. Winter barley also fits well into Byrne’s wider crop rotation, with a late June harvest providing opportunity for late-season soybeans.

“It grows all winter. But we can only grow the winter barley successfully up to maybe Sarnia. Otherwise, it gets too cold and it dies. Agronomically, fertilizer is the same. High fertility, and you have to have good drainage because this is heavy soil,” Byrne says. “We keep our nitrogen rates at 70 per cent of what we put on our wheat crop. Otherwise, our protein levels will get too high. You want to keep that protein down around 12 for beer. Yield for winter barley, last year we had 80 bushels, which is good. It’s more than I can utilize in the plant.

“My dad grew winter malting barley when I was a kid. It was a ‘wish we did, wish we didn’t have it.’ But I don’t think they had the agronomic knowledge given to them about growing the crop as much as what’s available today. There wasn’t as much about nitrogen rates, and a lot of that wasn’t in the picture. If it made good malt, great, and if not, we had pig feed.”

The malting process

The Byrne malt house is a multi-purpose facility where barley is germinated, heated, cleaned and bagged for sale. Many malt houses use tumbler systems for germination. Byrne opted for a more traditional floor system, in part because of the lower cost, and since managing small-batch craft quantities can be accomplished by a small number of people – Byrne and his sons Shaun and Ben, specifically. 

“We don’t have a cooling system, so only have about 10 or 12 weeks through the winter when we can malt because of the temperature. We have to keep the germination room at 58 F, no more than that. I want it cooler than that. And when the malt is on the floor it gives off heat,” Byrne says. “I keep it four to six inches on the floor, and the room heats up. As it goes through the modification process it gives off more and more heat. Tomorrow is going to be our peak day, and it will get up to 90 F. We have to keep turning it over to cool it down.

“There’s still floor malting in Ireland and Scotland. A little bit in England. That’s what we based our system on.”

Additional cost savings for operations in the malt house were secured through the purchase of a seed cleaner from the 1960s, as well as the salvage of materials – and the contact network – from Byrne’s time in grain bin sales and construction business.

Generating brewer interest

Byrne and his family first started malting in 2016, though a series of health problems and COVID delayed full operations until 2024. Currently they can produce around 400 25-kilogram bags (10 tonnes) of malt barley in a season, and supply several local breweries. There is capacity to expand with additional buyers, and Byrne is actively contacting potential new customers.

Getting more breweries onboard, however, is not easy, and it shows in the dearth of craft malt producers in the province. Indeed, Byrne is one of very few, if not the only small-batch malt producer left in Ontario.

From a brewer’s perspective, a major challenge with supporting craft malt is logistical in nature. Devon Lafebre, a southern Ontario brewer with 10 years in the industry, says it’s common for breweries to source a wide range of materials – hops, yeast, malt, equipment, etc. – from a single company, in an effort to save costs and reduce paperwork. Greater quality variation from malt barley grown and processed in Eastern Canada is also a problem.

“It’s almost like a one-stop shop. At this point, you almost have to have a portfolio of stuff we can pick from,” Lafebre says. “Our climate isn’t great for it either. The grain doesn’t do well in southern Ontario. The biggest thing for craft breweries is risk. They don’t have the same blending power or equipment that the big guys have.”

“If the consumer doesn’t care so much, there’s no extra selling feature towards going towards a craft malt that’s more varied but costs the same … especially now, with the margins in craft being so small.”

Dirk Bendiak, technical advisor for Ontario Craft Brewers, agrees practical challenges are a concern for small brewers. A lack of roasting capacity for craft malt producers – a step necessary to create different styles of malt – is another issue.

“Years ago, there used to be malt on this side of the country because distribution costs were so high. Growing it out west and bringing it here was a big deal,” Bendiak says.

“The other snag is, as soon as you bring Western Canada malt into the Ontario environment, it’s susceptible to humidity. It’s the same thing with hops. They grow here, but grow much better in the Okanagan region because it’s a desert.”

Still, he says there is opportunity for small-scale malt production to supply smaller-scale breweries.

“In Ontario, most of the little craft brewers are probably brewing under 5,000 hectolitres a year, which is quite small volumes. Probably 80 per cent of craft brewers are small brewers,” Bendiak says, adding there may also be marketing opportunities for products with all local ingredients.

Byrne himself remains optimistic. The malt business fits within their existing grain operation, they’ve had success with a few local breweries, and crucially, he enjoys the work. For now, he plans on knocking on more doors “to try and grow the business.

“We’re going to pick away at it. I know we’re going to get bigger with more sales. But we’re not going to be like Canada Malt in Montreal. The reality is we’re only going to be a niche small player,” Byrne says.

“Our sales are going up every year a little bit.”

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Heineken’s shares slid more than eight per cent in July when it warned that annual volumes would be broadly stable, rather than grow. On Wednesday, it said it expected volume to “decline modestly” in 2025.

Annual organic operating profit would also be at the lower end of its previously forecast four to eight per cent range, the brewer said.

CEO Dolf van den Brink said macroeconomic volatility had become more pronounced in the third quarter.

“We expect demand to recover when conditions normalise,” he said in a statement.

Analysts already expected annual profits to rise 3.9 per cent, and for volumes to decline by 1.8 per cent, according to a company-compiled consensus.

As a result, Heineken’s full-year commentary may be welcomed, said Laurence Whyatt, analyst at Barclays.

“All the negative stuff was expected. And in fact, it was expected to be worse,” he said.

Heineken shares rose almost one per cent in early trade, Oct. 22.

Brewers across the spectrum face long-term sales declines in some markets due to rising health concerns and disruptions from beer alternatives or even the emergence of weight-loss drugs.

But Heineken said its key challenges in the quarter, including weak demand for beers in Latin America and Europe, were short-term in nature.

Consumer sentiment has been rocked by trade tensions in key markets such as Brazil, where shipment volume in percentage terms contracted in the mid-teens, and Heineken has struggled to regain lost shelf space in its home region after a pricing dispute with retailers.

But it also reported market share gains in Brazil and Mexico, and a strong showing in previously difficult markets such as Vietnam.

The company reported a 0.3 per cent decline in third-quarter net revenues, just beating analyst expectations for a 0.8 per cent dip. Its 4.3 per cent volume decline was broadly in line with forecasts.

— Reporting by Emma Rumney

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United Malt Group, whose Canadian assets operate under the Canada Malting banner, last month locked in on a previously announced deal to sell itself to France’s Malteries Soufflet for A$1.5 billion (C$1.3 billion).

Sydney, Australia-based United Malt and Soufflet reported Aug. 7 they now have written confirmation from Canada’s Commissioner of Competition that the office “does not intend to make an application” to challenge the transaction.

Thus, United Malt said, the condition for Canadian regulatory approval “will be satisfied” if the commissioner’s notice isn’t reversed by Aug. 23.

United Malt reported separately Monday that it and Soufflet now also have confirmation from the United Kingdom’s Competition and Markets Authority (CMA) that the CMA has “no further questions in respect of the proposed transaction.”

Much like the “no-action letter” Canadian regulators provide in such cases, “no further questions” is the CMA’s standard response when the authority doesn’t intent to mount a public inquiry into the deal, United Malt said.

The world’s fourth largest commercial maltster, United Malt makes bulk malt for brewers, craft brewers, distillers and food companies and has 12 processing plants in Canada, the U.S., Australia and the U.K., with combined malting capacity of about 1.26 million tonnes. It had been owned by Australia’s GrainCorp since 2009 and was spun off in 2020.

United Malt’s Calgary-based Canada Malting unit, which alone produces about 400,000 tonnes of malt per year, includes malting plants at Calgary, Montreal and Thunder Bay, nine country elevators in the Prairie provinces, and Country Malt facilities at Delta, B.C., Brampton and Calgary.

Soufflet, which has 28 malt houses in Europe, Asia, Africa and Latin America with combined production capacity of 2.36 million tonnes per year, has been an arm of French agribusiness InVivo since last year. InVivo has previously said it plans to be the world’s top malt firm within five years. — Glacier FarmMedia Network

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Anglia Maltings operates seven malt facilities in the U.K., Poland, and Germany, with combined production capacity of 440,000 metric tonnes.

Privately-owned Richardson, which has operated since 1857, has been interested for 20 years in entering the malting business, but never found the right opportunity until now, CEO Curt Vossen said.

The deal fits Richardson’s strategy of processing the crops it buys from farmers, ranging from canola crushing and canola oil bottling to milling durum and oats, Vossen said.

“Now that we’re a food processor as well as an agricultural company, malting serves a fundamental purpose, it’s a natural fit,” he said in an interview.

Vossen said Richardson will buy European barley for its malting facilities.

He said Richardson will take time to understand the specifics of malting before deciding whether to expand the business.

The deal follows an announcement last week by French agribusiness InVivo of an agreement to acquire Australia-based United Malt in a $1 billion deal to create the world’s largest malt producer.

That deal, to be handled through InVivo’s Malteries Soufflet arm, was first proposed in March but now has approval from United Malt’s board of directors. Approvals from United Malt shareholders and regulators are still pending.

Among United Malt’s other assets in the U.S., Australia and the U.K., that deal would give Soufflet control of Calgary-based Canada Malting, which alone produces about 400,000 tonnes of malt per year.

Winnipeg-based Richardson, which employs over 3,000 people worldwide, handles and processes grain and oilseed crops. In 2021, it acquired Italgrani USA, North America’s largest durum wheat miller.

— Reporting for Reuters by Gus Trompiz in Paris and Rod Nickel in Winnipeg.

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“It will be an extremely tight and difficult year for the malt processors and ultimately for the brewers as well,” said Peter Watts, managing director of the Canadian Malting Barley Technical Centre (CMBTC) in Winnipeg.

“Not only did the hot, dry summer lead to a significant reduction in yields, it also impacted quality,” said Watts, noting higher protein levels were a big issue this year.

The rains that eventually came hit right at harvest time, “adding insult to injury” by leading to quality downgrades.

Total Canadian barley production in 2021-22, which includes feed barley, was estimated at 7.1 million tonnes by Statistics Canada. That compares with the 10.7 million tonnes grown the previous year.

Preliminary data from the Canadian Grain Commission show average protein levels for barley selected for malting in 2021 coming in at 12.8 per cent. That’s the highest of the past decade and well above the 10-year average of 11.7 per cent.

Maltsters typically like lower-protein barley, and Watts noted they are expanding their specifications in order to account for the higher protein levels. “Stuff that normally wouldn’t be accepted, will be accepted this year,” said Watts.

Higher-protein malt barley create processing challenges, including reducing alcohol extraction levels, altering water absorption, and leading to hazy beer.

The larger brewing companies may adjust their recipes to use more adjuncts, such as rice or corn, to compensate for the tighter barley supplies, but Watts said craft brewers don’t have that option.

The CMBTC is currently working with higher-protein samples to come up with modifications maltsters and brewers can use to adapt to this year’s crop, Watts said.

Some export customers do like higher-protein malt barley than is typically used in North America and would be a potential buyer for higher-protein grain in a year with more normal yields, but Watts expected export movement would be down in 2021-22.

“We’re just so short this year, there isn’t enough malting barley to go around,” he said.

“We’re in uncharted territory… people are not often forced to work with this kind of quality.”

While there will be challenges, one possible bright spot to come out of the year was the fact that maltsters will be forced to work with newer varieties that they may not have selected in the past, offering opportunities for those varieties to gain traction, Watts said.

Research into how the different varieties fared this growing season was ongoing, he added, with results and recommendations for 2022 to come shortly from the CMBTC.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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Peter Watts, managing director of the Canadian Malting Barley Technical Centre in Winnipeg, said rising demand from China is also raising prices for feed barley, urging growers to sell their crop and deplete domestic supply.

“They’re emptying their bins and prices have remained really strong,” he said, adding that carry-out stocks will be “very low” this year.

He added that 500,000 tonnes of new crop have already been slated for export to China this year. Domestic supply has already been reduced so much that high-quality malting barley has found its way to feed channels.

“In a year like this, (the barley) may be malt quality but the prices are so strong that producers have decided to take the cash and sell their malting barley into the feed sector,” Watts said. “It’s too bad to lose that good-quality malting barley, but if the livestock industry’s willing to pay for it, that’s where producers are going to sell it.”

In Agriculture and Agri-Food Canada’s latest forecast from January, seeded area for Canadian barley is expected to decrease seven per cent to about 7.17 million acres in 2021-22, citing competition from oilseeds. Meanwhile, production would decline by 12 per cent to 9.5 million tonnes.

Watts disagrees with that assessment. “We could see a five to 10 per cent increase in seeded area,” he predicted.

“I think producers will respond by seeding more barley this year, given the good prices. Assuming an average yield, we might see a bump in production next year.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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With domestic feed barley prices rising and domestic supplies shrinking with increased exports to China, high-quality malt barley has found its way to feed channels as growers look to sell their crop high.

“Producers have decided to sell their malting barley into the feed sector,” Peter Watts, managing director of the Canadian Malting Barley Technical Centre in Winnipeg, explained.

“There’s not a lot of incentive for farmers to sell their barley as malt right now. If the end user of malting barley wants to buy 2020-crop malting barley this year, they’re going to have to pay up, but buyers aren’t showing that premium right now.”

According to Prairie Ag Hotwire data from Wednesday, high-delivered bids for malt barley in Manitoba traded at $5 per bushel, compared to $5.25 for feed barley in the same province. Feed barley in Saskatchewan and Alberta was trading as high as $5.50 and $6.64/bu., respectively.

Despite losing the premium malt barley had over its lower-quality counterpart, a trade war between China and Australia, resulting in the former imposing an 80 per cent tariff on Australian barley imports last May, has boosted the demand even higher for Canadian malt varieties.

“We have a good malting barley export program with strong demand in China this year. With the very high prices recently, the demand has tapered off a little bit. China is looking for less expensive options, but there aren’t a lot out there,” Watts said. “Buyers are being scared off right now by the very strong prices.”

He also expects Chinese demand for malting barley to continue, as well as increased demand at home as bars and restaurants reopen.

“I hope farmers will grow malting barley varieties, because the new varieties yield very well and they give them an option for that extra 2.5 million-tonne market for malting barley that they wouldn’t otherwise have if they just grew a feed variety.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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The government in December enforced its third ban on alcohol sales since the outbreak of the virus to alleviate pressure on strained healthcare facilities after a rise in infections.

Unutilized stocks of barley, which is mainly planted for malting purposes in South Africa, stood at around 719,307 tonnes by December, 49 per cent higher than a year ago, according to data from the South African Grain Information Service.

Farmers say the ban is further hurting a sector still reeling from effects of drought conditions in 2019.

“The biggest impact will be on next year’s mandate to supply malt barley for the industry,” said Jose De Kock, chairman of the Barley Industry Committee, referencing to the 2021-22 season where plantings are due to start in around April.

“With the carryover that is already in the pipeline they are going to limit the mandate for next year, that is the fear,” he added.

Farmers could plant other crops, but De Kock said this may not be a complete solution with some of them in a crop rotation as part of disease and weed control measures.

“You can juggle a bit to the one side or the other side but you cannot not plant barley,” he said.

Anheuser-Busch InBev (AB InBev), which uses malting barley in beer making, lowered its mandate for the 2020-21 season to 380,000 tonnes from 475,000 tonnes in the previous season.

“There is the possibility that we will have to reduce the mandate further if the ban should continue,” AB Inbev’s director of agricultural development in Africa, Josh Hammann, said.

This may force farmers to sell excess barley as animal feed, which can be a 40-50 per cent markdown from the price of malting barley, said Abrie Rautenbach, head of ABSA’s AgriBusiness.

South African Breweries, part of AB InBev, is challenging the alcohol ban in court.

— Tanisha Heiberg is a Reuters correspondent in Johannesburg.

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“Feed grains are being squeezed by lower imports of U.S. corn into Western Canada,” analyst Chuck Penner of Leftfield Commodity Research said in a presentation Tuesday for the CropSphere conference. The Saskatoon-based conference moved online due to the COVID-19 pandemic.

“The last time we had a short barley crop we were able to import a whole lot of corn from the U.S., and we just haven’t been doing that, even with a strong Canadian dollar.”

In addition, strong Canadian barley exports are cutting into the availability of domestic supplies, with China a major buyer. While the country has also imported from Ukraine and France, those supplies are getting tight and China still needs more grain.

Domestic users have to compete against both the export market and U.S. corn, with strong feed bids forcing malt barley prices higher as well. Penner noted malt prices will need to go higher or malt-quality barley will end up in feed channels instead.

Looking ahead to the 2021 growing season, many crops pencil out favourably, which means barley area likely won’t see much change on the year.

A return to average yields would cut into supplies, and lead to an even tighter situation for barley in the new crop year, according to Penner.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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Feed barley bids delivered into the key Lethbridge feeding area have come down by $6-$8 per tonne over the past two weeks, with current prices around $240 per tonne, said Brandon Motz of CorNine Commodities at Lacombe, Alta.

“It’s been a juggling on a unicycle-type scenario for a lot of these feedlots,” he said of the general uncertainty brought on by COVID-19 and resulting plant closures in the spring. Slaughterhouses are back running near full capacity, but a backlog of cattle remains.

When the plants were closed and fed cattle were backing up, the response from feedlots was varied, with some booking extra coverage to protect the upside on prices, others buying hand-to-mouth, and others sticking to business as usual, Motz said.

While the backlog will remain through the summer or longer, feeders are covered now and the cattle are moving at a steady pace, he said, accounting for the dip in barley prices.

Looking ahead, questions of how much malt barley will end up in feed channels are overhanging the market.

With demand for malt down due to the COVID-19 pandemic and reduced beer demand, “it’s a fairly realistic scenario that quite a few of these malt contracts could end up as feed,” said Motz.

The U.S. corn crop and Canada’s own barley production could also sway the feed markets.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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