Errol Anderson was confident feed barley prices were on the rise this year, but then came the rains, and then came the frost.
“Prior to this weather, in all honesty I was kind of bullish on the feeds a little bit because of the tightness of barley and the lack of rail cars that will be available to move corn from the states into (Alberta),” said the ProMarket Wire analyst.
He is now anticipating a glut of feed wheat that will prevent any price rally for feed barley.
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“I thought we would be insulated a bit, but with this weather, this has changed the whole thing. Suddenly now there is ample supply of feed locally.”
Charlie Pearson, a crop market analyst with Alberta Agriculture, sees little upside for feed barley prices.
“We’re probably going to go sideways here for a while,” he said.
That is the outlook for an area such as Lethbridge, where there is plenty of livestock and a competitive feed market.
Farmers in places such as central Saskatchewan could see downward pressure on barley prices, especially because it will likely be difficult to book freight this year, and trucking costs will be higher than usual.
Growers planted about 6.09 million acres of barley, down 14 percent from last year. Pearson said it wasn’t a great year for the crop in Alberta. It was too hot in the summer and too wet during harvest.
“There’s a bunch of things that suggest quite a bit smaller barley crop here,” he said.
Analysts expect strong malting barley demand because of a poor quality U.S. crop, so anything of acceptable quality in Canada will be snapped up by the malting industry, further reducing feed barley supplies.
Pearson agreed with Anderson that there will be fierce competition from feed wheat because of downgrading caused by harvest rains, frost and high levels of fusarium head blight infection.
“We’re going to have a lot more feed wheat around than we’ve had other years,” he said.
Lynda Martell, a nutritionist with Masterfeeds, said wheat can be substituted for barley in beef and dairy cattle rations using proper nutritional management.
“We’d certainly be looking at it at the right price,” she said.
Barley is the preferred feed choice for Alberta cattle producers.
“It gives a firmer fat in the finishing of cattle and it’s available and cost effective,” said Martell.
There is also less chance of cattle developing acidosis on a barley diet.
However, wheat can be a good alternative at the right price and quality specifications. Masterfeeds would be looking for wheat with a bushel weight of at least 60 pounds per bu. and less than one percent dockage.
“We want a heavy wheat and something that is fairly clean,” said Martell.
Buyers will watch for ergot, reportedly a big problem. Samples will also be tested for vomitoxin, but they can’t do that for every load.
U.S. corn could also be considered in livestock diets, but Martell wonders if the rising U.S. dollar may prevent large imports.
The U.S. Department of Agriculture keeps increasing corn yields. The estimate released last week was 171.7 bu. per acre, resulting in a record 366 million tonnes of production.
That has driven corn prices down into the low $3 per bushel range.
“We’re probably going to be able to land corn into southern Alberta for $180 to $200 (per tonne),” said Pearson.
Feed barley was selling for about $165 per tonne delivered to a feedlot in Lethbridge last week, or $3.59 per bu.
Pearson said feed barley prices in Alberta can’t get too far out of whack with imported corn prices or feeder cattle will start moving south.
“Do you bring seven or eight lb. of corn north to feed an animal here or do you take an 850 lb. feeder down to the states?” Pearson said, referring to the amount of corn it takes for one pound of gain.
Even Europe is awash in feed wheat, which is another reason feed prices will be in the doldrums this year.
“It’s bad news for barley and cereal growers but probably good news for the livestock industry in that their cost of gain will be fairly low.”
