Feed barley just can’t get a break.
The 2015-16 price outlook is poor, even with low production and razor-thin stocks on the Prairies, says a major Manitoba barley buyer.
However, farmers who still have unpriced old crop barley might have a pleasant surprise in the next few months.
“As we get to spring and as these stocks start to get depleted, we could see a real rally,” said Steve Bloss of Maple Leaf Foods’ feed grain sourcing wing, which buys 430,000 tonnes of feed per year in Manitoba.
Read Also
Going beyond “Resistant” on crop seed labels
Variety resistance is getting more specific on crop disease pathogens, but that information must be conveyed in a way that actually helps producers make rotation decisions.
He said stocks are “really tight” right now, which is unlikely to change in 2015-16. Even if farmers boost barley acreage 10 to 15 percent, that would still be small in an historical context.
Prairie farmers seeded 5.5 million acres of barley in 2014-15, compared to 6.6 million acres the previous year. Acreage has steadily slipped as other crops provided farmers with better profit potential.
However, Bloss said the tight stocks won’t give farmers the needed boost in prices and profits because of a large supply of cheap feed grains in the United States and overseas. Barley is tight in Canada but not on the world market, and imported U.S. corn production is replacing barley in feed rations and might swamp them this coming crop year.
“Our inclusions on feed barley over the year … have only ranged between five and eight percent,” said Bloss.
“Corn has been heavily weighted, wheat has been second and barley is just a small part.”
Maple Leaf has at times had 40 percent barley in its feed grain rations.
Barley prices in Manitoba have been around 120 percent of the value of corn, which makes it unattractive to buyers, Bloss said.
Barley and feed wheat in southern Alberta have been at about par, which also makes barley unattractive.
“We use a least cost formulation,” said Bloss. “When you put these kind of numbers into a least cost formulation, it’s going to turn back and say you need corn, you need wheat and you don’t need barley.”
China has been a recent positive surprise for overseas barley demand, with a big boost in imports last year. However, burgeoning production in Russia and Ukraine in recent years has put many millions more tonnes onto the world market.
