USA: Barley prices continue to fall

Following the lead of corn, feed barley prices continued to fall during the past two weeks, and feed barley’s current price puts the crop in a unique situation, according to Valley Grain Milling’s Randy Brag quoted on August 9 by Farm & Ranch Guide.

“When you look at barley prices right now, there is actually a premium for feed barley over corn,” Brag said. “Feed barley has 90 percent the feed value of corn and in some parts of the country we are seeing $2.50 to $2.30 corn and feed barley at some elevators is at a $2.50 level.”

Brag feels producers are finally starting to see a true market price for the various commodities, including barley, that were impacted earlier in the year by lack of grain movement.

“We had a market held up by freight,” Brag said. “If we would have had rail cars moving on an orderly fashion all winter long and if we would have had enough truck drivers to move this crop, this market would have been in the tank in March.”

Brag wouldn’t be surprised to see the feed market dip even lower now that we are moving into harvest and everybody is full of grain.

“We could go down another 30 cents pretty easily,” he noted. “Some of the analysts are saying that corn could go down another 50 cents.”

Another thing that is holding down the price paid to farmers is the cost of freight. Currently elevators are paying up to $4,000 for a COT car, which amounts to around a dollar a bushel for barley and then you need to add in the regular freight rates.

This is why there is such a high basis for feed barley, according to Brag. And the situation isn’t any better shipping by truck with a $3.50 to $4.50 per mile typical hauling charge.

“It just takes a whole lot of places out of the market because of the freight aspect,” he said. “We have the most expensive rates in the world right now to move grain.

“A farmer isn’t going to make much money selling feed barley for $2.50 a bushel, in fact he is probably looking at a loss.”

The malting barley market, on the other hand, is stable at this time, with the cash prices supported by the contract prices for the 2014 crop. Even though we are getting close to the time when the 2015 contracts will start being issued by the maltsters, Brag doesn’t expect the current low feed barley prices to have much of an impact on next year’s contract prices.

“I think they are going to have to ensure contract acres,” he said. “We are just starting to get a few new crop samples of malting barley coming in from Cass County, and we don’t know what to expect yet in terms of quality for this year’s crop.

“But knowing the malting barley companies, they are going to have to keep some malting barley growing out there and will likely have to come out with some numbers that are competitive to soybeans and maybe wheat,” he added.

He noted there have been some yields reported of just over 100 bushels an acre, and many of the samples were weighing 50 pounds with 95 plump. However, there are some issues of vomitoxin showing up, which is why he said it’s still too early to determine crop quality.

The average local elevator cash board price for feed barley was $2.50, which represents a 25-cent decline over the past two weeks. Malting barley average cash prices, however, remained steady at $4.25 a bushel.

13 August, 2014