High Alta. feed barley bids spur demand switching

The continuing upward trend in Alberta old-crop feed barley cash bids over the past few months is seen to be making other feed grains more attractive to buyers.

"We’ve seen inclusion rates of feed wheat go up, so feedlots are buying more feed wheat because it’s more cheaper than feed barley," said Jim Beusekom, a grain merchant with Market Place Commodities at Lethbridge.

Inclusion rates for dried distillers grain have also increased, he said. Corn distillers’ grain can displace as much as 25 per cent of the feed barley in cattle rations.

As prices have increased, the amount of feed barley used has dropped, he said. Despite the decline in feed barley usage, that has not caused a big enough dent in the continuing upward price trend for Alberta feed barley, Beusekom said.

The ongoing upward trend seen in Alberta feed barley spot prices is tied to the continued tightness in the cash market, he said. With grain prices moving upward, sellers are currently reluctant to move their feed barley.

Cash spot bids for feed barley are trading at $255 per tonne in the Lethbridge area, he said. That compares to $240 per tonne a month ago and marks an increase of almost $40 to $45 per tonne since mid-February, Beusekom said.

Currently, spot bids for feed wheat in Lethbridge are going for $245 per tonne, Beusekom said, and the price for corn distillers grain at Lethbridge is around $265 per tonne.

However, despite the declining spread between feed barley and other feed grains, U.S. corn is still not competitive, currently going for $290 per tonne in Lethbridge, he said.

U.S. corn prices would have to be at par with Alberta feed barley prices in order to be competitive, at around the $255-$260 per tonne level in Lethbridge, he said.

Feed barley historically reaches its peak between May and June, which means prices may still have some room to the upside, he said.

However, feed barley prices should taper off after July, he said. New-crop Alberta feed barley values are considerably less, around a $40-$45 spread for early September.

Eventually old- and new-crop Alberta feed barley prices will start converging as farmers begin selling their barley after spring seeding and June’s rainy season, Beusekom said, and that will move old-crop Alberta feed barley prices downward.

Declining feedlot demand after July will also help move Alberta feed barley prices down, he said.

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