The Global Market and It’s Impact on Your Brewery Tyler Schoales – Malt Specialist, North American Craft

Today’s Agenda Global Barley Markets Snapshots of major growing regions with a global balance sheet Australia Black Sea European Union Impact on the marketplace Global Summary North American Market Snapshots of Major Growing Regions Canada USA Crop Expectations and Quality Report NA Summary

Global Barley Markets

Global Barley Production

Global Barley Balance Sheet

Global Factors: Australia Rainfall totals are still below average Crop conditions better at this time this year than last two seasons Very dependent on moisture as we progress out of Australian Winter Could see an extra million tons of production versus last year

Global Factors: Black Sea Ukraine set to have largest grain production ever recorded, with an extra half-million tons of production Harvest 90% + completed Russian harvest just beginning, good yields in the West As harvest progresses East yields are declining and wet weather delaying harvest and quality concerns raised Production similar to last year of 73mmt, versus initial expectations of 80mmt

Global Factors: European Union Winter crops are looking good across the map, and harvest progressing well Spring barley showing concerns of dryness in many areas (Spain estimated to loose 2-million tons of production) Yield will be affected already in many areas, but possible rain event in coming weeks could provide relief Market currently $18USD higher per/MT FOB Sweden/Denmark in 2020 versus 2019 Overall production likely 3-4mmt higher than 2019 but quality still largest concern

Global Summary

Overall Global Outlook Quality challenges in Black Sea, EU EU Pricing is likely to be down somewhat from the very high points of 2018 Crop pricing Minimal quality stocks from last year Growing risks in Australia which can impact overall global market Production overall should be up significantly versus last year If quality can materialize then we should see price stabilization 2021 pricing already inducive to another large barley crop globally

North American Market

Canadian Barley Production Top 3 Provinces Alberta Saskatchewa n Manitoba Predominantly mild winter temperatures until February Severe temperatures in February (> -6°C from average) Minimal moisture from October 2018 to March 2019 Several moisture events in April with increased temperatures Soil moisture still light at planting, even though heavy snows in April helped Warm temperatures from May 11th forward facilitated planting Planting completed as of the end of May: ~2 weeks late

Canadian Barley Balance Sheet

Canadian Barley Outlook Alberta British Columbia Saskatchewan Manitoba Ontario Quebec Coastal Containers Plantings up overall across Canada, in response to tight carry-out of 2018 crop in Canada and Worldwide. Producers also favouring Barley as Wheat and Canola Exports to China have been heavily impacted by trade foolishness. Overall, the crop is 5 to 15 days behind the 5 year average. Some concern that the delay could see some early fall weather. Rainfall in late June was recorded helped relieve concerns over dryness, stabilising yield potential and improving overall crop conditions. Lower temps and recent rains will likely drive lower proteins and good plumps in areas where the rains came on-time. Following cool conditions with plenty of rain, the weather has turned to sun, with warm temps. Overall the forecast is good for the coming weeks, with some spotty rain events – not a big concern at the moment, except MB. Alberta General: Overall, good looking crop in Alberta with some minor drought/heat stressed acres 75% of acreage in “Good to Excellent” condition Saskatchewan General: SK had no real rain through June 15 thus yields and proteins impacted While rains were late average yields still a possibility Average protein Manitoba, Quebec, Ontario and Maine General: Adequate moisture and moderate temps have driven good protein and plumps Unfortunately high risk of DON across the board

U.S. Barley Production Top 3 States Idaho Montana North Dakota

U.S. Barley Production

USA Barley Outlook PROTEIN DOWN, what else CHANGES? Washington (Palouse) 5%: Slightly delayed planting with subsequent drop in ag yields 10-11% protein average, lowest in years! Good overall quality Idaho 65%: Overall great crop with up to 1% drop in protein Early assessment of dryland protein sitting around 10% Winter barley programs continue to shine with best crop since development Dakota’s: Highway 2 and N had weak rains and therefore showing lower plumps and increased protein content Highway 2 S Crop looking good with timely rains and adequate sunshine Wyoming and Montana: Good overall crop quality this year Irrigated land performed once again and similar quality to be expected in 2019 Colorado: OK crop this year with 30% curtailment on H2O impacting farmers Expect some less than ideal quality due to cut back on irrigation practices California / S Oregon 5%: Expectations high for quality out of region Good crop with timely rainfall and heat waves Similar to previous years crop with average proteins 11-11.5% Idaho winter crop looks good and warmer weather will get the barley to full maturity with harvest commencing this week. The heat will not hurt the crops but is needed to promote crop development. Even with current warm temperatures during the day, the nights will still be cool. Spring barley crop in Idaho looks good with the earliest fields having the water turned off. 85% of the Idaho crop rated “Good” to “Excellent” by NASS-USDA Montana crop is very good, but has some variability on Dryland areas. Irrigated areas look excellent. 92% of the Montana crop rated “Good” to “Excellent” by NASS-USDA The Palouse (North Central Idaho, South Western Washington, Northeast Oregon) area has been cool with plenty of moisture. Warmer weather will help the crop. It was late getting planted and needs the growing degree days to reach maturity. With DON pressure and excess moisture, ND will have a very challenged crop. With the delayed planting, Harvest will start the later side of average. PROTEIN DOWN, what else CHANGES?

NA Summary

Overall NA Crop Outlook Crops across Canada and the US look quite good on quality and yield, with a couple of patchy zones Plantings Up in Canada, Flat in the US with little carry over from previous year North American Feed markets establishing a solid floor for Barley pricing, unlikely to see any reductions, even with the increased worldwide production Barley continues to competing with GMO crops Canola, Corn, Legumes (Beans) Barley Supply in Canada and the US very tight through New Crop delivery US and Canadian Crops are a little behind – some risk of early autumn weather Cooperation from mother nature has accelerated the growing season Good Crop Year = Barley in the Bins