Feed cost increases have feedyards paying attention to the weather market


With historically slow corn planting in the U.S. and Ontario due to adverse wet weather conditions, the consequences are building. As the doubts on how much of the desired corn will get planted, feedyards are having staring higher feed costs in the eye.

The latest USDA planting progress report will come out today (Monday), but some analysts are suggesting unplanted acres could be more than 30 million acres as of June 3rd.

On Friday, Anne Wasko of the Gateway Livestock Exchange discussed rising feed cost concerns: “For cattle inventory that you have not purchased yet you will be pulling out your calculator and realize that you will need to be paying less for feeder cattle because of that rising feed cost,” she says.

Brennan Turner, Farmlead wrote in his weekly RealAgriculture column that, “should 10 million acres of corn go into Prevent Plant, ending stocks could drop to 1.005 billion bushels and corn prices could easily climb to $5.”

Currently, feed barley prices delivered to Lethbridge are around $5.35 per bushel for immediate delivery while fall new crop is $4.65 per bushel according to a couple local Picture Butte feed yards.

With the drought on the Prairies, we could see a production shortfall of barley in Canada — for opposite reasons to the Midwest — but this would create further reason to expect feed cost increases.

Similar to corn growers being advised to make sales into market strength, feedyards are being advised to watch this market very closely as hedge funds unwind short positions and the weather risks mount higher.



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