MarketsFarm — Solid demand continues to keep feed barley bids in Western Canada well supported, as end-users work to secure supplies in anticipation of tightening stocks going forward.
“Competition for barley is coming from every which direction: grain companies exporting barley, feedlots trying to cover barley, and grain companies trying to cover feedlots,” said Jim Beusekom of MarketPlace Commodities in Lethbridge, adding “the competition is brisk.”
Feed barley is currently trading at around $250-$255 per tonne in the key Lethbridge feeding area.
Farmers do have barley for sale, but the market expects tighter supplies by the latter part of the crop year.
“Everybody is trying to own some before the supply gets tight,” Beusekom said.
“The market is pretty efficient, and will find a way to ration the supply that’s out there,” he added, noting “the higher the price goes, the more options there are with feed.”
While barley currently accounts for most of the grain going into cattle rations, prices may be reaching a point where alternatives come into play. Corn, feed wheat and rye could all displace barley if the prices pencil out in their favour.
Those alternative feeds will eventually cap the upside for barley, but Beusekom noted corn and wheat are also trading at strong levels and the trend remains pointed higher for now.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.