January 6, 2012

 

 

 

Warm winter temperatures have contributed to a steady downward price slide in feed barley values. However, a cold snap or possible drought conditions later on as spring starts could move prices upward.

 

Lethbridge feed barley prices in early January have fallen from CAD218 (US$214) - CAD219 (US$215) per tonne in December down to CAD212 (US$208) - CAD213 (US$209), said Jim Beusekom of Market Place Commodities at Lethbridge.

 

Some of the recent softness in Alberta feed barley prices have been from the unseasonably warm weather in the province, he said. Such conditions, he said, are creating "huge efficiency" for feeding cattle.

 

While feed consumption is steady for cattle currently, conversions to weight gain to cattle have been very solid, which is creating reduced demand for feed barley, he said.

 

Apart from their more efficient use of feed grains, producers are less willing to sell their feed barley, as they still have easier access to their grain bins in the warmer weather, he said.

 

Prices will remain steady for the first two weeks in January, Beusekom said.

However, demand is expected to fall in February and March as the new growing season will begin, moving prices downward, he said.

 

As feed barley values have fallen off their highs in December, two issues may help to reverse the trend and move prices upward, he added.

 

First, a sharp cold snap in the middle of January could cause a boost in demand as feed producers would need more feed for cattle.

 

Second, dry conditions seen so far this winter may also spur potential drought as spring growing season starts, which would be seen as supportive towards prices, Beusekom said.