Downgraded domestic grain hits the market, but most Alberta feedlots had already ordered their corn supplies
Cattle in southern Alberta’s “feedlot alley” won’t be seeing corn leave their diets any time soon, according to one feedgrain buyer.
“The marketplace booked up a fair bit of corn in advance of it, so through September, December and even out into March,” said Dave Guichon, owner of the AgValue Group in Calgary.
“So that’s all been done, that corn will continue to come in.”
Corn from the United States and Manitoba started making its way into feedlots last year because barley and wheat supplies were tight following a dry growing season in southern Alberta and Saskatchewan. And while the cold, wet fall this year has led to an influx of downgraded grain hitting the feed market, that doesn’t mean corn will be leaving feedlots any time soon because most had pre-booked corn supplies.
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“We’ve finished up harvest here,” Guichon said.
“We’ve gotten a fair bit of barley and a fair bit of feed wheat now that is available for the marketplace. It’s not coming in droves or anything like that. It’s small amounts, but our demand is small because it’s already been covered by corn.”
Guichon said the amount of downgraded grain hitting the market for feed isn’t completely known yet. Farmers are still assessing their harvested crops, seeing what can be dried and what can be blended and bought by elevators. However, Guichon doesn’t expect a lot of grain to hit the feed market because most of the downgraded grain is located in northern Alberta.
“We don’t have access to that market down into southern Alberta because of the freight, logistics are too wide … so it never would have been coming to southern Alberta,” he said.
The corn imports are keeping a lid on the feedgrain market in Lethbridge. Guichon said corn was selling at $246 to $248 per tonne earlier in the month, feed barley was $246 per tonne and feed wheat was $240 per tonne.
Exports are also playing into the feedgrain market. The barley export market has been strong during the last year because of drought in Australia, Guichon said.
Canada has been able to take over market share in Asian countries, such as Japan, that Australia would usually sell to because of its closer proximity to the market.
“There’s been some sales done that we maybe normally wouldn’t get and that’s sort of kept the price relatively high,” he said.
However, the export market isn’t a safe bet heading into the winter. Political tensions between Canada and Saudi Arabia have led the Saudis to stop buying Canadian barley. However, Canada may have an opportunity to sell more to China because of the China-U.S. trade war, which has stopped business between those two countries.
“A lot of that will depend on currency, what the Canadian dollar does, how we compete. Relatively speaking, global supplies of both malt and feed are tight,” Guichon said.
