MarketsFarm — As corn became the primary feed grain at Alberta feedlots over the past few months, the demand for — and price of — feed barley have diminished over time.
But according to one trader, this won’t mean demand will shift from corn to barley anytime soon.
Evan Peterson of JGL Commodities in Saskatoon said one spot price for corn in southern Alberta was $450 per tonne ($11.43 per bushel). On the Chicago Board of Trade (CBOT), the May contract for corn has steadily traded at around US$7.50/bu. since the Russian invasion of Ukraine in late February.
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Meanwhile, the high-delivered bid for feed barley in Alberta was $9.80/bu., according to Prairie Ag Hotwire. Peterson added that barley had a bid of $8/bu. picked up from the farm in Alberta. Despite barley’s lower prices compared to corn, the latter is still the grain of choice at feedlots.
“There’s lots of corn in southern Alberta. Trains are moving very smooth now, a lot more efficient than they were. It seems that feedlots are overflowed with corn right now, which has just driven demand for everything way down,” Peterson said.
Even if feedlots had the capacity to add barley, he added, last year’s drought has hampered supply.
“The problem is, there isn’t enough barley out there to really change anything,” he explained. “The supply of barley on the farm gate is so low, that you physically do not go out and buy it on a cheaper value to replace expensive corn.”
Peterson predicts fewer barley acres to be seeded this year in Western Canada due to lower prices and its lack of heat resistance compared to wheat, for which prices have risen due to the unrest in Ukraine.
“Now that we have such high new-crop milling wheat prices, along with oats and canola, farmers are going to grow less barley,” he said.
Peterson anticipates feed grain prices to remain strong but turn flat in the near future. However, he didn’t rule out the possibility that barley prices could change.
“With acres being down, we’re going to be paying more money for barley. Plus we’re going to see export barley probably kick in overseas, which really hasn’t been in full effect yet, but I think it will in the next little while.”
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
