Feed weekly outlook: Lethbridge feedlots buying U.S. corn

corn harvest
(Allan Dawson file photo)

CNS Canada — As barley prices climb, feedlots around Lethbridge have found a cheaper feed option: corn from the U.S.

“Price has (pushed feedlots to buy corn). Barley, it’s probably $4, $5 a tonne higher than corn price right now. And the cattle feeder can source corn quite easily and more economically than barley,” said Allan Pirness of Market Place Commodities in Lethbridge.

Producers also aren’t as interested in selling their barley for feed. According to Pirness, it seems they are getting prices from grain companies who are exporting barley.

The grain year just started in August but as of Aug. 26, according to the Canadian Grain Commission, 64,100 tonnes of barley have been exported. This marks a lower level than last year at this time, when 184,700 tonnes had been exported.

“We’re starting to see some more of a switch over to U.S. corn in the feedlot space here. That’s going to take some wind out of the barley sales,” he said.

Corn prices from the U.S. are lower due to large stockpiles. According to the U.S. Department of Agriculture, corn stocks in the U.S. as of June 1 were at 5.31 billion bushels, up one per cent from the previous year.

Cash bids for feed barley for producers are currently at $248 per tonne, while corn is at $247 per tonne, according to Pirness.

Given feed barley’s current price, Pirness doesn’t think it will hold there long and is recommending producers should consider selling.

“We’re starting to take away some pretty crucial feed barley demand at these prices. The expectation for barley to go higher at this point is kind of unfounded unless the other markets (are) taken higher,” he said.

There also won’t be a shortage of feed grain, unlike the forage shortage that is currently gripping Western Canada, according to Pirness.

“We’re seeing OK crops; they’re not huge crops but they’re OK,” he said.

Not a lot of wheat is making its way into feed market as it’s too expensive, Pirness said. Producers are getting better prices from the grain companies, as the quality of the crop is good.

— Ashley Robinson writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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