by Professor Ross Kingwell, AEGIC Chief Economist
Spatial change in global barley production has occurred over several decades. Southern hemisphere barley producers like Australia are now much more dependent on export market revenues than their northern hemisphere counterparts. Southern hemisphere barley producers increasingly are exposed to export markets as the export share of their barley production has grown strongly in recent decades, making the southern hemisphere an increasingly main source of barley exports.
Over many decades, up until the mid-1990s, northern hemisphere barley production grew strongly. But then it gradually declined by ~25%; and subsequently has plateaued since the early 2000s (Figure 1). By contrast, barley production in the southern hemisphere has continued to grow consistently at almost 3.5% per annum.
The changes in relative production between the northern and southern hemispheres have caused the global share of barley production coming from the southern hemisphere to grow strongly (Figure 2) and also caused the southern hemisphere’s share of global exports of barley to increase (Figure 3).
In recent years over a third of international exports of barley stem from the southern hemisphere, especially Australia. The plateauing of the southern hemisphere’s share of global barley exports, evident over the last several years is attributable to a few factors such as very poor production years in eastern Australia in seasons 2017 and 2018 and increased barley production in the Black Sea region prior to the outbreak of war between Russia and Ukraine in 2022.
Nowadays often between 40% to 60% of southern hemisphere barley production is exported; and Australia is the principal exporter (Figure 4). The share of southern hemisphere barley production that is exported has steadily grown since the 1960s. Hence barley producers are very exposed to export markets; as recently experienced when China imposed, but later removed bans on Australian barley.
The increased importance of export markets means there is a growing need for the Australian industry to continue to invest in enhancing export market opportunities for Australian barley.
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AEGIC is an initiative of the Western Australian State Government and Grains Australia.