Barley prices in the key Lethbridge, Alberta cattle-feeding area have risen steadily over the past two months, but may be nearing their highs for the time being as other commodities are starting to displace barley in rations.
Barley is currently trading in the $275 to $285 per tonne level in the Lethbridge area, which compares to harvest-time lows of about $245 per tonne, said Jim Beusekom of Market Place Commodities in Lethbridge. He said the post-harvest rally was normal for this time of year, but the levels were just much higher.
The high prices are allowing some small amounts of feed wheat to find their way back into the cattle rations, said Beusekom. Distillers dried grains (DDGS) from U.S. ethanol plants are also starting to look more economical, although corn is still too expensive.
The market will likely stay flat around current levels through the winter months, with little carry in the market at the time being, said Beusekom.
“Our expectations are for (the barley market) to stay fairly flat over the next several months,” said Beusekom. He said domestic prices are higher than the export market, which will keep the barley staying local.
With little upside or downside potential, volumes will likely slow down heading into the New Year, before seeing an increase in activity as the spring approaches, said Beusekom. At that time, North American moisture conditions and the direction in the U.S. grain markets will dictate what happens in barley.
“There’s plenty of barley around for the next several months,” said Beusekom, although he said supplies could be short by spring time.