There is no unified prairie feed grain market this year.
There are dozens of small, localized markets.
Prairie farmers will have to keep that in mind when moving either good quality feed-type crops or damaged milling-type crops that have been reduced to feed quality.
“It’s going to be a localized demand,” said Errol Anderson of Pro Market Communications in Calgary.
Analysts and advisers caution farmers to research where to get the best price or find interest in their feed grains this winter, because conditions vary widely due to varied growing conditions and frosts at harvest.
Read Also
Interest in biological crop inputs continues to grow
It was only a few years ago that interest in alternative methods such as biologicals to boost a crop’s nutrient…
Farmers with quality feed grains like barley should be able to get good money and lots of interest – and have a chance for price rallies this winter powered by tight corn supplies in the United States.
On the other hand, farmers with damaged and downgraded crops that need to move them into the feed market may need to act fast before a flood of similarly damaged crops arrives. Even those with good feed-grains in the bin may want to make sales soon, while supplies are still short.
“A high percentage of the wheat in the fields now is going to be best-case three red, and in the case of Alberta, most of it will be feed because of recent frost,” said Doug Chambers of Quality Grain in Calgary.
“A guy who’s got wheat in the bin, catch your opportunity to move it now, because once that feed wheat comes off the combine (across Western Canada), you’ll see it depreciate.”
Three dynamics are in play in the prairie feed grain market, analysts say, and they will define the macro-conditions of the fall and winter market for feed grains:
• Huge supplies of damaged crops are in the fields, waiting to be combined and to hit the grain system.
• There is quality feed barley from last year in bins, but the crop now being harvested appears in poor shape. Anyone producing quality feed barley will enjoy good demand.
• The offshore market for barley and feed wheat, driven by a worldwide rally in crop prices, is competing with the prairie livestock feeding and ethanol markets.
The way these three factors influence local markets will vary depending on specific situations.
John Duvenaud, the editor of the Wild Oats Grain Market Advisory, said farmers with quality feed grains should sit back and let the corn-based rally run.
“Put it in the bin and let the buyers come to you,” said Duvenaud.
“Chicago corn is five bucks a bushel. Feed wheat and barley both have room on the upside.”
Anderson said farmers with damaged milling wheat should look for hog producers as a market.
Hogs love feed wheat, the hog industry is recovering and there aren’t many other local markets that have a preferential demand for feed wheat.
“Call your pig farmer,” said Anderson. “There are going to be feeders focusing on feed wheat.”
But Chambers said farmers shouldn’t expect Alberta’s feedlot alley to use downgraded wheat. The worldwide wheat rally and the reinvigoration of the Canadian Wheat Board market for feed wheat means damaged wheat is still too expensive compared to barley.
“I don’t see wheat being a factor in the feedlots because the price will be just too high,” said Chambers.
The general rally of crop prices is the only happy factor for farmers whose crops are downgrading in the fields, but advisers say farmers can get the most value for their particular crop if they find buyers who most need what they have. Just because local buyers are sated with huge local supplies of some feed grain doesn’t mean others in different areas aren’t still looking.
“There are so many questions in a year like this when there are so many variations from one part of the country to the other,” said Chambers.
