Feed barley prices will likely stay on a one-way street between now and
the fall, with only some short rallies along the way, say market
analysts.
Driving the downward prices are an expected increase in Canadian barley
production and no expectations of a sharp spike in demand over summer.
A lot of pens are empty at Alberta feedlots, said Errol Anderson,
president of ProMarket Communications, a market advisory service for
farmers and ranchers.
He said most feedlots already have booked their barley and corn
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supplies for at least well into the summer.
“Their needs are, for the most part, fairly well looked after.”
Adding to the pressure on barley prices is the cold spring, which is
slowing seeding progress. The more planting gets delayed, the more
likely it is that farmers will shift acres into crops like feed grains.
Under the current market scenario, Anderson said growers with unsold
feed barley in their bins will want to watch the markets and take
advantage of any rallies, however brief they might be.
For the new crop year, analysts expect feed barley prices to average
below those of the 2001-02 crop year.
Dennis Jackson, an Agriculture Canada coarse grains analyst, expects
prices ranging between $125-$155 a tonne in the new crop year.
That compares to an average of $155 a tonne, in-store Lethbridge, for
the current crop year, he said.
An expected increase in western Canadian barley production remains one
of the factors weighing on the price outlook for the crop now going
into the ground.
Canadian barley production is expected to be 14.4 million tonnes, an
increase of three million tonnes over what was harvested last fall.
Weather during the growing and harvesting season will help determine if
those projections hold true. Unfavourable weather could inject
uncertainty into the markets, perhaps causing brief rallies.
Until now, soil moisture on the Prairies has generally been improving
this spring, said Jackson, although there are areas of Saskatchewan and
southern Alberta where dry weather remains a concern.
United States corn production also is expected to increase this year by
about four percent, Jackson said, which is “going to keep U.S. prices
from moving too aggressively.” Corn and barley prices tend to move in
step with one another, although there can be aberrations.
One of the question marks in the outlook for barley prices in Western
Canada is how tough Alberta might get on imports of grain infected with
fusarium head blight.
Strict controls with no tolerance for infected grain would raise feed
grain prices in Alberta, said Jackson. It could also undermine prices
for farmers in Saskatchewan and Manitoba who cannot grow fusarium-free
grain.
While Jackson expects Alberta imports of U.S. corn to fall to more
historic levels in the coming crop year, he said that could change if
Alberta, with its large feedlot industry, halts all imports of
fusarium-infected grain.
