CNS Canada — A lack of available barley and steady rise in feed corn prices has pushed the market higher in southern Alberta.
According to Jim Beusekom of Market Place Commodities at Lethbridge, barley prices have risen from $220 per tonne, since the start of February, to the current price of $230 per tonne.
“The reason why price has gone up is barley exports,” he said, adding that “the price of corn relative to feed barley, has also gained in value.”
According to Canadian Grain Commission data, Canada has exported 981,900 tonnes of barley (as of Feb. 11) compared to 501,400 a year ago.
Corn continues to be trucked in from Manitoba and the U.S., he added, and more farmers are switching to it because of the ready supply. Some feeders are having difficulty finding enough feed grains to cover their needs.
“Even though corn is still the same price or a little bit more money than barley, we are seeing feeders continuing to shift to using U.S. corn,” he said.
For the feed barley that is delivered, some farmers are managing to get $5 per bushel.
“That is bringing in more grain as it’s a target price for many farmers,” said Beusekom.
Corn continues to set the pace when it comes to price. If corn moves higher or lower, he said, he expects barley and wheat to follow suit to some extent.
Looking ahead to spring and summer, though, he sees a point where barley could begin to trade at a healthy premium to corn.
“The export business looks healthy and that should keep the odd farm prices fairly snug,” he said.
For now, though, all three commodities continue to trade in and around the $230 per tonne range delivered to Lethbridge.
“They’re all in sync,” he said. “However, it is difficult for feeders to buy enough barley, so in order to get enough feed grains they’re switching to using more corn all the time.”
There is the chance, however, that corn prices on the Chicago Board of Trade could rise or fall depending on a weather event, which would eventually trickle down to the feed market.
As well, the latest U.S. Department of Agriculture supply and demand report dramatically raised the ending stocks number for the U.S. to a whopping 2.48 billion bushels.
The estimate for the next harvest was also hiked to 14.6 billion bushels, 26 million higher than the previous forecast.
— Dave Sims writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.