Hot and dry harvest weather should be some comfort to farmers who fought to get the crop off during the past few years, says Paul Cassidy.
But that’s about the best thing the Calgary analyst with Mitcon, Inc. can say about the barley market.
Cassidy believes few farmers forward-sold their barley earlier this year at better prices, even though they knew prices in the fall would be dismal. Last week, Cassidy pegged cash bids for barley delivered to Lethbridge at $107 to $112 per tonne. He said he thinks Alberta feedlots are reasonably well-supplied.
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After three or four cycles of losses, feedlots are now shipping fat cattle at even greater losses.
“They’re not anxious to buy cattle again to put them in the lots, at this point,” said Cassidy.
Jerry Klassen, analyst with Growers Marketing Services, said he advised farmers to sell 25 to 30 percent of their barley when futures prices were at $130 to $135 per tonne earlier this year.
But he said farmers who haven’t sold any barley might be able to find some prices as high as $120 at the feedlot before the end of August.
Price fluctuations
Klassen predicts prices at feedlots in September and October around $110 per tonne, with the next rally coming when cold weather hits.
He expects farmers from the Peace River area, who traditionally sell to the export market through the Canadian Wheat Board, will try to move their barley to southern Alberta this year to get better prices, adding supplies to the domestic market.
Farmers who have light barley may want to try selling it soon to their local elevator to be blended with heavier barley.
“If you wait too long with it, further into the crop year, the deliveries to the elevators will taper off,” said Klassen
But Greg Kostal of Pro Farmer Canada notes feedlots have become reluctant to buy blended barley from elevator companies in the past few years.
More barley trade is now done without a middleman so feedlots can get uniform barley, said Kostal. Blended material gets lost in the process.
Find a friend
Kostal said farmers who need to sell light barley should try to develop good relationships with feedlots, although sales will be at a discount.
Klassen said discounts for 46 to 48-lb. barley are generally $5 under the No. 1 CW price, while 44 to 46-lb. barley generally goes for $10 under the No. 1 CW price, he said.
Barley weighing less than 44 lb. isn’t worth more than screenings, said Cassidy, and can be sold for use in feed pellets.
