(Resource News International) — The convenience for end-users importing dried distillers grains with solubles (DDGS) into Western Canada continues to cause cash bids for barley to deteriorate.
The loss in barley`s cash value was seen continuing, given that DDGS have now become part of a scheduled program by the feedlot industry.
“The need to cover barley needs by end-users has been slowing disappearing due to the increased availability of alternative supplies, particularly DDGS,” said Bill Craddock, a south-central Manitoba producer and commodity trader.
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A cash dealer, who did not want his name used, agreed DDGS use is up in Western Canada and that could be tied to the increased ethanol usage in the U.S., confirmed by the U.S. Department of Agriculture in a supply/demand report Tuesday.
“Feedlots as far away as northern Alberta have already incorporated DDGS into their programs on a regular basis,” the dealer said. “It will never totally displace barley in the feed rations, but DDGS sure have cut significantly into barley’s feed ration share.”
Feedlots also do not have to cover their rations as far out as previously.
The dealer noted that some feedlots at one point were covering supplies three to four months out. Now those same lots may be covered only a half to one month out due to the availability of DDGS and alternative supplies.
Adding to the depressed cash market in Western Canada is the continued decline in demand from the livestock sector, as the liquidation of both cattle and hog herds by producers remains strong, Craddock said.
Warmer-than-normal readings across much of Western Canada this winter have also reduced the need to cover feed rations, the dealer said.
Cash bids for feed barley, delivered to the elevator in Saskatchewan, based on Prairie Ag Hotwire data, currently range from $2 to $2.24 a bushel, in Manitoba from $2.80 to $2.81 and in Alberta from $2.10 to $3.22.
Cash bids for feed barley, delivered to the elevator in Saskatchewan, based on Prairie Ag Hotwire data, in early February ranged from $2.18 to $2.53 a bushel, in Manitoba from $2.81 to $2.85 and in Alberta from $2.14 to $3.25.
