Farm Byline: June 2021
A rising tide and the price of feed barley
by Al Gustin
A rising tide lifts all boats. That phrase, popularized by John F. Kennedy, describes the idea that when an economy is performing well, all people will benefit from it. These days, we often hear it used by people who analyze the grain markets.
The prices of major crops do tend to move in tandem, because, to a certain extent, crops can be substituted for each other. That’s why strength in demand for soybeans tends to improve the price of canola and sunflower. Similarly, barley and even wheat can be substituted for corn in livestock rations.
I was listening to a local radio station on May 7 as the announcer gave the closing cash grain prices at the nearby country grain elevator. He said spring wheat, 14% protein, $7.42; corn, $7.50; soybeans, $15.99; NuSun sunflower, $24.85; canola, $32.25. I couldn’t help but think of the dramatic improvement in prices since harvest, due to weather concerns somewhat, but due in large part to increased demand, especially for corn and soybeans, especially from China.
The local price of corn on May 7 was two-and-a-half times what it was last August, when it was $2.87. Quoted soybean and canola prices were roughly double what they were then. Spring wheat was up by $2.68.
But the last thing the radio announcer said was feed barley, $2. Two dollars? I called the manager of that elevator and asked him what the price of feed barley was last August. He said $2. “So, what’s with feed barley?” I asked. He said, “There just is no demand.”
There was a time when feed barley was an important commodity. When almost every farm had hogs, those hogs ate a lot of barley. Milk cows and chickens ate some, too. Today, there would be little feed barley available if feeders wanted to switch from corn. A few producers still raise some feed barley, mostly for their own use. But there’s not much bought and sold on the open market.
And so, it seems, a rising tide lifts all boats, unless they’re carrying feed barley. That’s the message we get from at least one North Dakota elevator.