At a time when farmers are hammering out final crop plans, ranchers and feedlot operators are also looking ahead to ration formulations ahead of the first new-crop harvests.
To get a sense of western feed markets, RealAg Radio host Shaun Haney invited Jim Beusekom, president of Market Place Commodities Ltd., on stage at the recent TechTourLIVE event at Lethbridge, to talk about feedlots, barley supply and demand, the durum dilemma, and feed wheat market dynamics.
Beusekom says that of course every feedgrain discussion has to start with corn, or rather barley’s price in comparison to corn. “But not just corn,” he says, “You have to look at wheat futures too — many are pricing into the feed markets. Barley trades down to another commodity like it, like when feed wheat is available in large volumes or there’s a shortage (of barley) and feeders need to supplement for volume, and that’s corn and sometimes wheat.”
Feeders are comfortable being flexible on rations, and choosing the commodity that makes the most sense to keep cost of gains down. Barley has historically been the cheap feed, yes, but things have changed, as farmers have expanded cropping options. And as you move further from Lethbridge, the barley that is grown is often geared for the malt market or destined for export.
What has been interesting, Beusekom says, is the amount of durum that’s been coming west to Alberta and making its way into rations, and that’s all a function of price and volume. Durum growers are still sitting on some 2017 crop and prices for quality just aren’t there yet. The lower quality durum has definitely been moving to make room for new crops in the bin, he says.
He says that the feed barley market feels a little like July, where there just isn’t much supply and the price diverges from the corn market. That, and there’s been true feed wheat entering the market, which further creates opportunities for feeders and farmers alike.
Listen below for a much more detailed discussion: