MarketsFarm — Strong export demand for Canadian barley and rising corn prices in the U.S. are expected to continue to keep feed prices well supported in Western Canada.

“Feed grains are being squeezed by lower imports of U.S. corn into Western Canada,” analyst Chuck Penner of Leftfield Commodity Research said in a presentation Tuesday for the CropSphere conference. The Saskatoon-based conference moved online due to the COVID-19 pandemic.

“The last time we had a short barley crop we were able to import a whole lot of corn from the U.S., and we just haven’t been doing that, even with a strong Canadian dollar.”

In addition, strong Canadian barley exports are cutting into the availability of domestic supplies, with China a major buyer. While the country has also imported from Ukraine and France, those supplies are getting tight and China still needs more grain.

Domestic users have to compete against both the export market and U.S. corn, with strong feed bids forcing malt barley prices higher as well. Penner noted malt prices will need to go higher or malt-quality barley will end up in feed channels instead.

Looking ahead to the 2021 growing season, many crops pencil out favourably, which means barley area likely won’t see much change on the year.

A return to average yields would cut into supplies, and lead to an even tighter situation for barley in the new crop year, according to Penner.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.