Feed Hay Plentiful, Barley Going Up As Market Tightens

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Alberta wouldn t be Alberta without its winters and the surprises they may bring. Some years are exceptionally cold, a fact of life for more northern areas of the province. In the southern regions, producers sometimes count on chinooks to delay the need for winter feeding and to reduce snow cover throughout the season.

However, when it comes to winters in Alberta, nothing can be counted on. Every year seems to be it s own challenge. Last year we had a pretty long winter, but from a health standpoint it s always a little bit difficult to see thefuture. F romthefeeding standpoint, I wouldn t say that we ve had to take any major precautions yet, but we re just getting into this new crop so we ll see what challenges that brings us, said Matthew May of Feedlot Health Management Services in Okotoks.

By and large, hay feed should be plentiful, and relatively inexpensive, especially when compared to drought years. For what got seeded the yields were pretty good, but there were a lot of acres that obviously didn t get seeded this year just because of how wet the spring was. But what we re hearing is that the yields of crops that did get planted are pretty good so we ll see what the total numbers shake out at, said May.

Fewer cows, more hay

Brian Perillat, manager and senior analyst at CanFax, said there s a lot of extra hay this year, and with smaller cow numbers, that definitely kind of cheapens the forage prices.

That s good news for feedlot operators, but they re being squeezed on the other side by high calf prices.

It s a lot more money and capital on the table just to buy these calves and the feed for them but projected fed cattle prices into the spring are upwards of $1.20 or $1.20-plus (per pound) possibly in Canada, which would be pretty much a record high, Perillat said.

He says that so far, barley prices have been fairly steady, considering the corn market south of the border. However, market factors are beginning to push barley higher, what s uncertain is just how much higher barley may go.

Feed costs, volatility is the biggest thing. It s a little bit tougher in terms of feed grains that the feedlots are looking at. It s not as open or as transparent a market compared to the U.S. corn market. Barley is a lot less volatile, we ve had a big feed advantage over the U.S. all year basically and that s kept a lot of the feeder calves in Canada, Perillat said.

Strong wheat prices and a good wheat crop mean less feed wheat is going to be available to the livestock sector, which is going to exert more upward price pressure on other feed grains.

When corn prices really shot up earlier this year, our barley prices didn t really react at all. We had a lot of feed grain and a lot of feed wheat in Western Canada, but those supplies going forward are probably going to tighten up. For the most part, there s not much feed wheat around because there was a good quality wheat harvest this year. Perillat said barley supplies are still fairly tight.

We re over $200 per tonne. Just recently in Lethbridge we were up to $210 for feed barley, so that s $4.50, $4.60 a bushel.

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Feedcosts volatilityisthebiggestthing.

BRIAN PERILLAT

CANFAX

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