Many farmers are relieved to finally be able to see barley Pool Return Outlooks.
But while the PROs reveal the prices that farmers who use Canadian Wheat Board pools will likely receive, they still leave many farmers with feed barley having to decide whether to sell through the board or to the local domestic market.
This year’s picture is murkier than in most years, farmer advisers say.
“Domestic feed barley bids are all over the place,” said Brenda Tjaden Lepp of FarmLink Marketing Solutions.
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Elevator prices in some areas range by up to 80 cents per bushel.
“In some areas the board’s at the low end of that and in some the board’s at the high end of the range.”
Most years the CWB has little if any export feed barley business so the domestic feed barley market is the obvious favourite.
But this year, unexpected offshore sales have appeared both before and after the federal court decision that maintained the board monopoly. That has led to private and board bids that can outcompete local feed bids.
Tjaden Lepp said a few farmers will still be able to benefit from sales made before the court decision, because a grain company appears to be still filling the last of an offshore sale and has been offering prices of $3.20 to $3.30 per bu. delivered in a few locations in Saskatchewan.
Otherwise, prices are substantially lower.
The feed barley PRO for 2007-08 is $206, which is well above the March PRO of $182, but under the better summer bids through grain companies.
Adviser Mike Jubinville recommended his clients sell 75 percent of their available feed barley through grain company contracts.
“I’m happy I did that,” said Jubinville, reflecting on today’s lower prices. “I kind of wish I’d done it all.”
The wheat board appears to be honouring grain company sales and contracts that were made before the court decision preserved the monopoly, keeping that grain outside the pool accounts.
Tjaden Lepp said farmers in all areas need to check out local feed bids and compare those to the PRO price when deciding how to market their feed barley.
But she isn’t recommending her clients market any of their grain through the wheat board’s pools. Instead she thinks farmers should jump on today’s historically attractive prices to lock in profits.
“In these markets I’m not going to wait around to see if the PRO actually becomes the final,” she said.
“I’m going to take the (Fixed Price Contract). I’m going to lock in some (Early Payment Options). I’m not going to wait around for an average.”
Whether farmers will be able to make many feed barley sales through the CWB also remains to be seen.
Grain companies sold hundreds of thousands of tonnes of barley into offshore markets for fall delivery, so new sales will be difficult.
“It makes me wonder how much more we can actually do,” said Jubinville.
“It’s not a case that the market isn’t there. It’s just that transportation logistics can only move so much grain at one time.”
