MarketsFarm — Solid offshore demand for Canadian barley remains the key driver in the domestic feed market, keeping prices high.
“It’s certainly not driven by southern Alberta, it’s driven by Vancouver and the export business,” said Allen Pirness, of Market Place Commodities in Lethbridge, on the continued strength in barley bids.
Typically, arbitrage opportunities would see Alberta feedlots pull barley in from Saskatchewan. But that’s not the case this year, he said, as growers can get a better price from their local elevators buying barley for export.
Canada has exported 1.77 million tonnes of barley through the first 23 weeks of the current marketing year, according to Canadian Grain Commission data. That’s up by 72 per cent compared to the same time the previous year.
Corn is also expensive and generally priced out of the market for the time being, trading at around $325 per tonne into the Lethbridge market, Pirness said. Barley bids are nearing $300 per tonne.
While prices are high, feedlots are generally covered and there’s not much business going on at the current levels.
“They saw this coming, so they bought early and they bought big,” Pirness said.
The strength in the feed market is also spilling into the new crop, with strong new-crop bids starting to appear. Wheat prices haven’t risen to the same extent as barley, so Pirness expected barley may see increased seeded area in the spring.
“If (farmers) are looking for a cereal in their rotation, they’ll take a good look at barley,” said Pirness.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.