MarketsFarm — Feed barley bids in Western Canada have softened over the past two weeks, as some normalcy returns to the feeding sector.
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.