Low grain yields in Alberta mean high grain prices will continue

The combines are now parked, and fall field work is underway.

Geoff Backman with the Alberta Wheat and Barley Commission said it was a tough year for many farmers who were plagued with drought conditions.

“They’re really hoping for rain next year because two years of this would be financially devastating,” said Backman.

The crops are now in the bin, and the numbers show yields are significantly down.

“For the most part, we are hearing that, regionally, yields are between 75 to 50 per cent of what they experienced last year and that just isn’t the amount of grain that we are used to having,” added Backman.

The provincial five-year yield index shows this year is 37 per cent below the five-year averages. Demand is up and so are prices. This time last year, feed barley in southern Alberta was $5.50 a bushel; it is now nearly $9 a bushel.

“These are the highest prices I have seen, but it’s not just me. I’m young compared to some of the farmers and some of our members, and they are reporting that these are some of the highest prices they have ever seen in their careers as well,” added Backman.

The high grain prices directly impact the cattle industry, specifically feeder cattle.

“It takes a big bite out of calf prices, so if we are talking $4 barley versus $8 barley, roughly for every dollar increase in the price of barley, you take about 20 cents off the price of calves,” said Brian Perillat, manager and senior analyst for Canfax.

Perillat said many cattle producers can’t find the grain they need in Canada and are relying on feed from south of the border.

“We’ll be importing a significant amount of corn. It should start flowing into the southern Prairies or into Alberta into November and that is going to be the biggest feed source,” he added.

Backman said the grain shortage is worldwide.

According to Agriculture and Agri Food Canada, Canadian wheat supply was 40.7 million metric tonnes last year, and is forecast to drop to 27.6 million metric tonnes this year.

Canadian barley supply was at 11.9 million metric tonnes last year, and is forecast to drop to 8.0 million metric tonnes this year.