Canada: Western Canada farmers to plant more wheat than barley because of large difference in price

With wheat showing strong returns across Western Canada, it appears producers are showing more interest in wheat than barley, Grainews reported on February, 1.

“Wheat is garnering a significant portion of the acre increase, barley a little less so at the moment,” said Bruce Burnett, director of weather and market analysis with the Canadian Wheat Board in Winnipeg.

Bill Craddock, a trader and producer in southern Manitoba, said the large difference in price between the two grains is a main reason for more wheat going into the ground.

“It’s (wheat) an easy crop to grow, we sold some wheat for C$8.11 the other day, and I have never sold red spring wheat for more than C$8 per bushel,” Craddock said. “Meanwhile, we have a lot of barley sitting in the bin, and all we are getting bid at is C$3.80 per bushel.”

A couple of other factors, he added, are causing fluctuation in both price and acres this spring.

“The overabundance of feed wheat in Western Canada has hurt the barley market big-time,” he said. “The other thing is the DDGs (dried distillers grains) coming in from the U.S. to the ethanol industry, and that’s been a major factor as well.”

Although he agreed wheat would be more popular than usual - as opposed to barley - in terms of seeded acres this spring, Burnett said there may not be as much area seeded as producers are hoping for.
“We’re very vulnerable to some spring flooding conditions on the eastern side of the Prairies, and I think it’s going to be difficult for producers to plant all the acres that they want,” he said.

“If we see wet conditions, and the wet soil dries out later on in May and into early June when it’s too late to plant wheat and canola, we could see a scenario where barley and oats increase a lot more than people expect. That’s the one advantage barley could have this year.”

Assuming that planting conditions are favourable come spring, new-crop contracts for wheat could continue to increase, Craddock said.

“We can get C$8.30 per bushel right now, but I think we will get something better, maybe as much as C$8.50 per bushel," he said.

Disease could also be a factor for both crops, should wet conditions continue during the first part of the growing season, Burnett said.

02 February, 2011