Forage and grain prices

[charliep]

Sorry to break into your side of the world from the commodity area but am getting ready for some meetings and need some on the ground help.

What are current feed barley, wheat and pea prices? Barley ould appear to be $4/bu southern Alberta.

US corn delivered S. AB. would appear to be too expensive. I use 75 cents over CBT futures converted to Cdn $ or about $240/tonne in the current market. Make sense? Imported US corn southern Manitoba?

Spot hay, straw and green prices? One of you mentioned $120/short tonne (6 cents/lb)for hay (don't know quality) in commodity marketing area.

Strategies and thoughts on the feed side for this coming winter. I know there was a lot of creativity in 2002 but everyone highlights the two periods are significantly different - that is 2002 preceeded by some better profit times in the cattle industry.

[charliep]

the meetings I am referring to are below. Not there but preparing some slides for the presenters. Have to admit hay is the biggest challenge. Can add pasture rates to this challenge as well.

Cow/Calf Producers - Understanding Your Options Meetings

Below is a list of the meeting locations and times:
Locations: Claresholm June 16 Community Centre
Hanna June 17 Legion Hall
Ponoka June 18 Moose Hall
Wainwright June 19 Wainwright Communiplex**
Drayton Valley June 22 Buck Creek Community Hall
Westlock June 23 Westlock Inn
St. Paul June 24 Senior Citizen’s Hall


All Meetings: 7 – 11 pm -- **except Wainwright (1-4pm)

AFSC
Lending
Agri Stability
Crop Insurance
Agriculture and Rural Development (ARD)
Alberta Drought Risk Management Plan
Pasture Management
Cattle Feeding
Salvaging annual crops for feed
Tax Deferral
Forecasting and Outlook on prices
This is an opportunity to learn and discuss cattle and cattle feeding options with specialists from AFSC and ARD

source: http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/webdoc12712

[farmers_son]

I can't offer too much help on hay pricing. I have hay on hand from last year that was intended to be sold but it is no longer for sale at any price. Our hay land that produces 1 to 1 1/2 bales per acre on a normal year and can do up to 3 1400 pound bales per acre on a good year can't even feed a gopher this year. There is absolutely nothing out there at all.

For us, this is worse than 2002. In 2002 we had a little bit, this year there is just nothing.

Some of our hay reserves are stacked away from home. We are going to have to move that hay home right away because leaving it miles from home is just an invitation for someone to help themselves. There are also concerns about fire.

I would think there is no market for hay as there is none for sale.

[grassfarmer]

I must say things are looking up on our place. The last week has made a difference - the hot weather and end to frosts has given the regrowth quite a boost, I guess we must had had more residual moisture than we thought. We have rented more pasture and are planning rest periods of anywhere between 60-150 days between grazings. Fairly comfortable we can get through to Christmas without feeding as is, any significant rain will be a bonus. Definitely a year that needs active management, the traditional "graze into the dirt" operations are in deep trouble even out in this area.
We are renting additional pasture now at $.90-$1.00 per pair which is way more attractive than buying winter feed will be. We got lucky on one quarter we just rented - hauled cows down on Friday, just finished and got hit by a 1/2 inch dump from a thunderstorm. A mile and a half north we got less than a 1/10th on the home place.
As we buy all our winter feed that is a concern - preference would be to buy a pile of salvaged grain crops for silage and bulk out with straw. I think there is a good chance there will be plenty of crops needing salvaging given the poor and late season we are having, especially in the frost trap I live in. Time will tell. As farmers_son says this looks way worse potentially than 02/03 as we have missed out on most of our spring flush of grass. I guess on the other hand it's early enough in the season it could turn around for pastures anyway. Three or four inches of rain in early July would still be welcome!

[blackjack]

Charlie...we kept all our cows in 02 and bought the expensive feed. Like you said about the conditions our operation came off excellent prices from 99-02. If the farm does not raise enough feed the culling will be harsh.We will have enough grass for the cow-calf for the summer but the yearlings we usually run to 9 weight(still on feed)will be sold if we continue to miss out on a general rain.Hay crops that averaged 3 ton/ac last year are maybe a quarter of that.Here west of Penhold our silage crops are actually looking pretty good.Family on the other side of highway 2 different story.Crops, hay, pasture all in poor to fair and going backwards. Thunderstorms rolling through the area tonight maybe the start of some more.

[smcgrath76]

Charlie,
In talking with a lot of producers I
know that hay is moving for 6 cents a
pound in the yard if you can find it.
That is regular grass hay.
Lots around here buying hay and feeding
cows, and I see from the Monday report
out of Veteran that live cattle prices
are sliding pretty fast. This is a good
indicator sale as it is the first of the
week, has decent volumes and pretty
strong buyer support.

[charliep]

thanks for comments.

I note the ASB/ARD meetings are about managing through difficult times and not getting boxed into a corner of being forced to make bad decisions. They are very full meetings with lots of information but hopefully there is time for discussion (I somehow suspect they may go past 11 pm).

[farmers_son]

I certainly hope these meetings are about how Government intends to help.

What people need to hear is that AFSC is not going to force producers to keep cows off of hay land until some time after July 1 when that hay land obviously has no production potential left. People need a place to put their cows today and the pasture is all gone. It is breeding season and the cows need to pick up or there will be a second disaster this fall with high percentages of open cows. We typically have some grass in sloughs and headlands around hay fields but cannot access those acres unless we are willing to give up all or part of our hay insurance coverage. AFSC is strong arming producers to accept less or no coverage in order to reduce AFSCs coverage risk. AFSC should be ashamed of how they have treated producers up to this point. Any one with common sense knows the hay is gone but AFSC continues to stick to their policies of no 100% write off of a hay crop until after July 1. For goodness sakes there will be so many applications for adjustments after July 1 that the AFSC adjusters won't be able to keep up. If only for that reason AFSC should start writing off hay acres now.

I would also suggest AFSC consider writing off hay acres based on township. If you are in a given township the hay should be just written off giving the producer full coverage. Any other way will take too long.

I would point out that if hay and pasture insurance does not work this year no one will take it again.

Will AFSC consider speeding up insurance payments so producers have cash to do something. If we have to wait until fall it will be too late. We seriously have to consider all ways to keep producers from selling cows in order to cash flow their way through this disaster.

Speaking of cash flowing our way through this disaster how about a direct cash injection, ad hoc program if you. I understand disaster payments are not countervailable.

Or if Government does not have the stones to do that will they consider interest free loans? Not low interest loans but interest free loans with decent repayment periods (10 years). People need to be able to see their way through this or they will get cash flow from selling cows which will wreck the market and leave Canada with a much reduced cow herd. Unless reducing the cow herd is the Provinces goal something needs to be done. We will be looking for announcements at these meetings, not next month or next week.

Is there going to be freight assistance on hauling hay? It is one thing to buy hay, it is another to get it hauled to your operation. This is a disaster and Government needs to act like it is a disaster, not business as usual.

I notice there is no representation at these meetings from the ALMA Board. Do they not know that there is a disaster in the Province or do they not care? Or is the goal of ALMA to ensure that more producers exit the industry?

We are well aware that the province kicked in $100 to bail out Precision Drilling after years of record profits and only 6 months of economic downturn. Cow producers have been enduring 6 years of economic downturn and now a natural disaster. We do not need to go to meetings to hear how great Government programs are. We need to hear that Government gets we are in the worst disaster that many of us have ever seen and that they are going to take immediate action to save the industry.

From what I hear about what was called the Heritage Savings Plan and the billions lost in that the Government would do a whole lot better to support agriculture in times of disaster than invest billions in the stock market so they can lose 40 cents on the dollar.

Agriculture is a good investment. The cattle industry in drought stricken areas of the province is worth saving. Time is critical, producers need to know there will be support today, not next month.

[wade]

It has always been my complaint with crop ins./AFSC. They have always been hardnosed in the past with grain farmers also- supposed yield potential if it rains- won't let a guy cut his losses and maybe make cow feed from grain. If a guy has the balls to put some to use- leave a test strip- if it rains do the test strip counts- penalize him then for yield potential then. No rain- no yield potential loss and at least there was a little salvage- yeah, like we're gonna get rich off of what was salvaged! This policy has to be adjusted not our yield losses!
Hope things change guys, grain farmers need you around!

[grassfarmer]

Farmers_son, I find myself disagreeing with you as usual but please do not take this as an attack on you personally. When there is so much talk of the independent ranchers not wishing any Government involvement in their business I can't see how they can then turn around and ask for handouts when a crisis occurs.
I believe crisis management and drought or disaster planning are the producers responsibility not the Governments. I don't underestimate the severity of the drought or the ruinous impact it will have on some producers. I am not unsympathetic to producers in a desperate situation but to be honest it is too late in the day to be attending meetings on grazing management a month into a drought. No offense to Charlie either but I find it hilarious that he was fishing on here for essentially coffee shop banter to use as background info for the meetings informing other producers about the situation. Is this why the Government has high paid staff in their AG department - maybe we should claim consultancy fees for posting on here!!
I don't expect the Government to rescue me, it's my job to run my business, risks and all. I think calls for 10 year interest free loans are unrealistic, as is freight compensation to haul hay. We make our beds and we lie in them. Sure it's way worse as you go east in AB but that is one of the reasons the land is cheaper than in the west where it rains more. As someone else mentioned in another thread Government compensation in a crisis usually is counter productive and almost always penalizes those who are the best managers and use the most innovative ideas to keep their outfits going.

[charliep]

In my defense, sometimes the banter side in a coffee shop such as this
is likely the most accurate gauge for prices (particularly on hay) and
makes up for a lack of price transparency. In the feed grain price
surveys government does, I also know we get the bid side only so there
is no gauge to actual traded values and this will be a struggle in a fast
moving market which is likely to happen over the next couple of months.

[smcgrath76]

GF - I tend to agree with a lot of your
last post. I also have deep concern for
my neighbours and the communities they
do business in. A lot of a drought on
the first of June (now mid-June) was
built in 2006, 2007, and 2008.
That said, depending on the length and
extended severity of the situation a lot
of the available tools fall down
completely as having any useful impact.
We do need better, accessible,
affordable business/environmental risk
protection programs that farmers of any
size can take or leave as needed.
I agree 100% with you that government
programs tend to penalize good managers
and reward managers who manage to the
program but I don't know any program
where someone won't figure out how to
work it.

[farmers_son]

We had a little shower this morning, maybe a tenth so far. Best moisture I have seen in a long time. One tenth of rain is not going to change a thing however. I remain optimistic that we will see a big rain within a week. If we get into July without rain it will be very, very serious. It is pretty serious right now.

It is far enough into June that we are starting to know some things.

One...The hay crop is pretty much toast. Reports are that even first cut irrigated hay production is half of normal due to cold and frost.

Two...There will be widespread sell downs of the cow herd unless there is adequate forage availability. $100 a bale hay is more than most will or can pay in 2009. Might have happened in 2002 but not this year.

Three...This far into the season the only hope of good to above average forage crops will be from cereal production.

Four...There are a lot of acres seeded to particularly canola but other crops that are basically not going to amount to a crop. If those acres could be reseeded to a oats, barley or some other cereal they could produce a lot of feed. This needs to happen sooner not later.

If the Government is looking for what can be done, and that is a big IF, then anything that can be done to encourage forage production should be considered. Crop insurance policy in Alberta is you have to wait until July to reseed or you loose all or part of your crop insurance. If producers would reseed now and still get their full crop insurance payment they would consider doing reseeding for feed. Sure people have made cattle feed out of canola but it is better and easier to make good feed out of barley and oats. We need a lot of barley and oat acres seeded right now if we are to have enough feed to feed the cow herd this winter. However no one will sacrifice their crop insurance coverage which can be $150, $200 per acre or more in order to seed a new forage crop which cannot be insured and may not make anything if it does not rain.

I have heard talk, and it is at a level above coffee shop talk, that there could be a $25 per acre reseeding benefit to encourage those acres to be reseeded. I think if producers could get full insurance and get paid $25 per acre to reseed to forage that it could see tens of thousands of acres producing a forage crop for this fall instead on nothing. That needs to be considered.

[per]

Not sure if it will help as some of the meetings are done but barley at Okotoks is trading and moving for July pick up @ $3.70 a bushel at the bin.

[smcgrath76]

Has anyone made it out to one of these
meetings? I missed Wainwright as we were
moving cows, but spoke to a neighbour who
was there.
Any exciting, invigorating things
discussed?