Overcrowded feed market eats into profitability

CNS Canada — Alberta’s feed grain market is overcrowded with sellers, driving prices lower in a trend one market participant says is expected to stay for the near-term.

“Farmers keep asking if there’s a lot of grain out there, and that’s not really the main reason markets are falling off,” said Jared Seitz of Agfinity Inc., an Alberta-based online brokerage.

Farmers are eager to sell feed wheat and barley in order to free up bin space for new crop, he said, which is proving difficult in a market where there’s already grain to work through.

Feed barley is going for about $150-$155 delivered per tonne in Calgary through to Lethbridge. Old-crop feed wheat is between $180 and $190 per tonne.

Seitz said he expects those prices to stay into late October and the beginning of November.

Heavy precipitation this summer has lent itself to quality issues in the Canadian grain crop, which could add additional pressure to the feed wheat and barley markets.

“As a long-term thing there’s just going to be more feed grain to work through,” Seitz said.

Demand for grain that is available to move has been consistent, which means buyers are willing to pay better prices for old-crop loads, he said.

“That demand is for anything that can actually ship when needed.”

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.