February 14, 2005

 

 

Feed wheat displacing some barley in Canadian cattle rations

 

Canada's large feed wheat supplies are making their way into the western Canadian feedlots, displacing barley and weighing on values.

 

"There is a lot of feed wheat in the Prairies and it's making its way into cattle rations," said Russel Horvey of the Alberta Ag Info Centre.

 

Feed wheat is currently priced at a significant discount to barley and is also higher in protein and energy compared to barley, making it cheaper per metric ton, said Horvey.

 

Dave Guichon, of AgValue Brokers, said of all the feedyards in the province, the feed wheat usage is at about 10%, which compares to zero in normal years. More wheat is being fed in the Lethbridge region than Calgary, he said.

 

By the end of the crop year, Guichon expected 1 million metric tons of feed wheat would make its way into the cattle rations, while barley should account for 9 million tons. He thought there will be a 5 million to 6 million ton feed wheat carryout.

 

"Normally we'd never feed wheat," said Guichon, pointing to problems with managing the commodity. He thought wheat would make its way out of the rations as soon as the commodity loses its discount to barley.

 

Wheat must be priced at least C$6 to C$10 lower than barley in order for the feedyards to buy it, said a second brokerage source. As a result, the dealer thought both commodities were caught up in a "vicious downward circle," pulling and pushing each other lower.

 

Some feedlots that formerly used a 100% barley ration are now using up to 50% feed wheat, said Neil Blue, a cattle analyst with Alberta Agriculture. He said more care needs to be taken with wheat than barley.

 

Horvey cautioned against using wheat in more than a third of the cattle ration, due to potential digestive problems in the animals.

 

Feed wheat is a cheaper ration, said Herb Lock, a cattle analyst with Farm$ense Marketing. While the larger feedlots will use the least costly ration, most of the smaller lots are less willing to play around with the rations, he said. He thought the smaller yards would stick with barley, because in a lot of cases they grew the barley.