Feed pea pricing

[poorboy]

Charlie,

A while back you had told me that you had a kind of formula for feed pea prices, it was a % of soy or canola meal and a % of feed wheat if my memory is correct. Using your formula what should the feed pea market be at?

If you think that wheat is going to rally into spring like I do and given the high canola and soy prices do you think that there is any upside to feed pea prices.

[TOM4CWB]

Poorboy;

Agpro has offered feed peas in central/eastern AB @ $4.70/bu for Nov. delivery.. so a large increase has occured for product going west into the export market!

[charliep]

The formula is 1/3 the price of soybean meal and 2/3 feed wheat. It is based soybean meal and feed wheat having about the same enery. Protein content of soybean meal (46 to 48 %) is over double that of peas (realizing that many peas have 22 to 23 % protein but most nutricienists just assume 20 %).

I will have to do some research as to how soymeal is worth these days. Anyone with a dairy or hog barn who is buying soybean meal? Assuming soybean meal prices of $300/t and feed wheat of $135/t, the value of feed peas would be $190/t (just over $5/bu). That is, $100/t (a third of $300/t) comes from the value of soybean meal and $90/t (two thirds of $135/t) comes from feed wheat.

The article I wrote on this for the pulse growers is at:

http://www.pulse.ab.ca/newsletter/2001fall/sell.html

[TOM4CWB]

Charlie;

Where are you finding feed wheat at $135/t?

I checked the AGC AB AG web site, fd wht was at $115/t, and feed barley at $79/t. This would change your formula price down a large amount, wouldn't it?

[TOM4CWB]

Feed Barley should have been $97/t!

[charliep]

I used the AGC weekly feed grain prices.

http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/agc5474

A little high on feed wheat central alberta but mainly did as an example.

[charliep]

Found a source for Calgary soymeal - $368/t. tom4cwb challenge but I will stick with my $135/tonne for feed wheat (keeping in mind this is delivered feed mill and quality specs that approach a 3CWRS/2CPS). That would put pea values at $210/tonne based on its value in a hog ration. Most mills will discount this some (5 %) based on at least some rocks/soil tag on seed and its impact on the wear of rollers. The other issue is the ability to book feed pea supplies well enought ahead/guarantee continuous access - once a feed mill gets a customer switched to peas/accustomed to seeing, they don't want to have to stop using/including a week later because they don't have supplies available.

[poorboy]

Charlie,

Your formula indicates to me that the feed prices currently being offered are at the low end, so should be attractive to livestock users. This tells me that the price will probably not drop much below these levels, which is good for my long term marketing.

Thank you

[poorboy]

Sorry my reply should have read that feed pea prices are at the low end of prices for livestock

[TOM4CWB]

Charlie;

I have given some thought to the $115 vs. $135 feed wheat price in the feed formula.

If the formula is for landed in store feed wheat, at $135/t in the feed mills bin ready for use, then the same standard must be used for feed peas.

I am not advocating the depreciation of feed peas at all, just competitive prices.

Further feed peas must be ground, and many times scalped before they are processed (to remove rocks, dirt, and weeds like mustard), therefore the compounding of a ready to use soymeal and wheat blended feed is easier for feed mills to mix and produce with consistant reliable results. I do not believe this was part of your calculation.

If farmers are waiting for a $5.20/bu feed pea price, they may wait a long time... just like when the CWB waited for wheat prices to spike up last winter and spring!

Just a thought!

[charliep]

I agree that $5.20/bu in today's market is high. The objectives are two fold however. Get farm managers thinking about the value of their feed products in nutrient terms (a fancy way of saying their customers eyes) and working to being paid on this basis. Secondly, helping farm managers compare the edible and feed markets - given the high price of soybean meal, the feed market perhaps has more potential that edible yellows.

Where were you offered the $4.70/bu for feed peas? Haven't seen this high. I would be making sales here.

[TOM4CWB]

Charlie;

My Oct. 19 posting explains this.