Ethanol providing floor for feed wheat

Published: September 8, 2009

(Resource News International) — Feed wheat bids in Western Canada have been falling steadily over the past month on ideas that more of the wheat crop will likely grade as feed this year.

While bids from ethanol producers are also declining, that market could provide a slight premium for farmers within those catchment areas.

Darren Miller, head of logistics with NorAmera Bioenergy at Weyburn, Sask., said he was currently bringing in feed wheat at $3.75 per bushel, while paying $4 per bushel for winter wheat and soft white spring wheat.

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Those prices compare to the latest Prairie Ag Hotwire data which shows the top-end bids for feed wheat delivered to the elevator in Saskatchewan at $3.27 per bushel.

Miller said the higher starch content of the winter wheat and soft white spring wheat made them the preferred choice, and accounted for the premium.

The prices offered by the ethanol plant were generating steady farmer interest, as the price has dropped quite rapidly over the past month “and I still seem to be buying,” said Miller.

The facility has an annual production capacity of 24.5 million litres of ethanol.

Miller said the plant was currently using a 50/50 blend of wheat and corn to produce ethanol. Going forward, he thought the blend could see a shift to using more wheat, especially if wheat prices keep declining.

The corn used at the plant primarily comes from Manitoba, he added, with some coming from the U.S., and is tied to added transportation costs which are not an issue for locally-grown feed wheat.

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