MarketsFarm — Prices for feed grains are swinging higher because of shortages, according to Mike Fleischhauer of Eagle Commodities Ltd. in Lethbridge.
“One thing we are sure of is we are running out of inventory, barley for sure, and we’re 11 months away from new crop,” he said.
This year’s severe drought and excessive heat across the Prairies has led to shortages of a variety of grains, including barley and wheat. Fleischhauer estimated production this year is down 40 to 50 per cent compared to 2020. Adding to the situation are exports, such as to China.
“That’s keeping the price up high,” he said, noting traders need to fill export contracts.
“Every tonne that goes overseas or gets fed is a tonne less. We still have until August to the middle of September until harvest starts again,” he added.
The next couple of weeks will be indicative of the direction the feed market will take as more corn is imported from the U.S. Fleischhauer said he’s not entirely sure of how the market will react to a greater influx of U.S. corn.
Plus, there are Prairie producers who are trying to hang on to their barley and wheat for as long as they possibly can, he said.
“You get guys who don’t have to pay bills and they’re just going to sit on it,” Fleischhauer said, noting these producers are looking for barley to reach $12-$13 per bushel and wheat to hit $15/bu.
Adding to the mix, he said, along with feedlots there are hog producers, cattle ranchers and dairy producers also looking to acquire feed grains, making competition more challenging.
Presently feed barley has been fetching $7.20-$9.04/bu. delivered in Alberta, according to Prairie Ag Hotwire. Saskatchewan prices are $7.50-$8/bu. and those in Manitoba are $7.80-$7.88. Over the last week, across the region, prices held steady to increasing 20 cents/bu.
Feed wheat prices are running at $8.75-$11.43/bu. delivered in Alberta, while Saskatchewan is at $8-$10.25, and Manitoba is at $9.71-$10. Shifts have seen prices run from remaining firm to rising 14 cents/bu.
— Glen Hallick reports for MarketsFarm from Winnipeg.