Reduced Cereal Grain Output and Higher Demand Resulting in Robust Feed Prices

CANADA - The Canadian Wheat Board predicts a reduced cereal grain harvest combined with a vibrant offshore demand will maintain fairly robust feed grain prices this year, writes Bruce Cochrane.
calendar icon 3 October 2007
clock icon 3 minute read

With this year's prairie harvest running at about 85 percent complete wheat and barley yields have been variable ranging from below average to close to average depending on the exact location of the crops being harvested.

Canadian Wheat Board weather and crop surveillance director Bruce Burnett reports in the southern growing areas hot dry conditions took a significant toll on yields while yields in the northern areas are closer to average.

Bruce Burnett-Canadian Wheat Board

With that variable harvest there are going to be some areas that have significant quantities of feed wheat but, for the most part in terms of the wheat side at least anyway we're looking at a close to average quality crop.

The crop in the southern and central areas of the grain belt has been reasonably good with very little feed quality received from those areas.

But again, as we move up into those northern locations, we're seeing more and more feed wheat.

The way that's going to translate down is we're going to see an average feed wheat production.

Generally our average output on feed in terms of the total wheat crop is five to ten percent, somewhere in there.

In terms of barley, again, some of the later harvested barley certainly isn't going to be making malting this year because of some chitting and staining, that type of thing.

So, in terms of barley, the later half of the harvest as well is downgrading a lot of it into the feed side.

Burnett notes prices are quite buoyant right now due to some very vibrant offshore demand which is expected to result in strong prices for pretty well all of the commodities.

He expects the reduction in production on the prairies this year because of the hot dry weather combined with the increased demand for grains to result in prices remaining fairly robust.

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