(Resource News International) — Cash bids for feed barley in Western Canada have held fairly steady at some pretty depressed prices and the outlook continues to remain bleak.
“There is no doubt that feed barley values are going to continue to decline, especially given the excessively wet growing conditions and the outlooks calling for these kind of conditions to remain in place for quite some time,” said Jerry Klassen, manager with G.A.P. Grains in Winnipeg.
The wet conditions across the Canadian grainbelt were seen translating into a larger proportion of crops grading as feed.
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Klassen said wheat crops seeded after June 1, in particular, have a high probability of grading as feed.
“I think the grain industry is counting on three million to five million tonnes of the wheat crop in Western Canada grading as feed,” Klassen said.
And with the potential for a large portion of the wheat crop to grade as feed, the potential for producers to seed a lot more barley this spring and the absence of end-user demand, the outlook for cash barley is down, he noted.
Feedlots were said to have feed coverage on for at least the next 45 to 90 days, Klassen said. “They went into the summer holding onto a few extra cattle that they would not normally have on hand, accounting for the extra coverage.”
The potential for barley area to grow this spring follows the wet conditions on the Canadian Prairies, and the crop’s very short growing period.
“Even though the price outlook is saying ‘Don’t grow barley,’ producers may not have a lot of choice,” Mike Jubinville, an analyst with ProFarmer Canada said, explaining the potential jump in seeded barley area.
Crop insurance deadlines were fast approaching in each of the Prairie provinces, he said, and the lateness of seeding may require a crop that develops quickly, such as barley.
“The unfortunate part of this choice is that there is no export demand for the crop, unless producers want to compete with outside barley prices that are well below $2 a bushel (basis Saskatchewan) on the world export market,” he said.
“Demand for feed barley will again solely come from the domestic market.”
The potentially large U.S. corn crop and the potential for western Canadian end-users to again import large amounts of dried distillers grain (DDG) from the U.S. also are contributing to the poor price outlook for feed barley prices in Western Canada, Jubinville said.
Cash bids for feed barley, delivered to the elevator in Saskatchewan, based on Prairie Ag Hotwire data, currently range from $2.06 to $2.39 a bushel, in Manitoba $2.38-$2.68 and in Alberta $2.22-$3.37.
Cash bids for feed barley, delivered to the elevator in Saskatchewan, based on Prairie Ag Hotwire data in early May ranged from $2.35 to $2.48 a bushel, in Manitoba around $2.63 and in Alberta $2.18-$3.27.
