(Resource News International) — Feed barley bids in Western Canada have risen in recent weeks as demand picks up and farmers hold off on deliveries, but the upside may be limited given the abundance of competing feed ingredients.
Dave Guichon of Ag Value Brokers at Calgary said feed barley prices dropped hard at harvest time, but are now seeing a bounce higher.
The better prices, he said, were tied to an increase in demand, as the approaching winter has feedlots in southern Alberta starting to fill up with cattle.
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In addition, farmers were reluctant sellers at the recent lows in the market, said Guichon.
Producers in many parts of Western Canada are also still busy with finishing the harvest and fall field work. Once that’s complete, he expected producers would turn their attention to marketing.
Spot bids in the key Lethbridge, Alta. market for feed barley are currently around $144 per tonne, which was up by about $10 over the past week, according to data compiled by the Alberta Canola Producers Commission.
Guichon thought prices could go up another $5 to $10 per tonne before farmer selling picks up.
Wheat would start to be substituted into rations if prices move much more than that, he said.
Poor pool return outlooks (PROs) for some classes of wheat from the Canadian Wheat Board would likely result in more wheat being fed domestically, where the prices will likely be higher than offered by the CWB, he said.
Distillers dried grains with solubles (DDGS) from the U.S. are also continuing to find their way into Canadian livestock rations, limiting some of the demand for barley, Guichon said.
