Timing Key to Getting Best Value on Feed Grain Purchases

Farm-Scape is sponsored by Manitoba Pork Council and Sask Pork Farm-Scape is a Wonderworks Canada production and is distributed courtesy of Manitoba Pork Council and Sask Pork.

Grain and oilseed prices have dropped dramatically, pressured by increased global supplies of wheat and compounded by the melt down in financial markets which has caused the withdrawal of a lot of speculative money that was previously in grains and oilseeds.

Informa Economics vice president Dave Reimann says markets are extremely volatile so livestock producers will need to respond to changes quickly.

Dave Reimann-Informa Economics

It's been nice to see some relief on the feed grain side but again it still requires some careful marketing ability to time the sales of the animals to the processors or even hedging the meats off or again buying the feed grains on the other side of the equation.

Keep your eye on the various markets where you can switch rations around.

I expect that these markets are going to be extremely volatile.

We've fallen so far so fast that at some point we're going to stage a massive correction to the up-side.

And, if we time the purchase of feed grains poorly, we're going to get caught on that and it's going to get expensive.

I think what it takes is that, when the market does drop suddenly like we've seen in the last few weeks, it's good to extend a bit of coverage.

When it does rally and take off like that, try to back away and be patient because I'm quite confident we're going to see lots of dips to still buy into.

For the feed grain growers, again, when we get those rallies it's good to sell into those and try to time it.

I think there's going to be many opportunities for successful marketing for both players this winter but timing will be extremely important for players on both sides of the equation.

Reimann says the market is trying to discover where the bottom is and he expects wide shifts all winter long.

He says anyone who sleeps is likely to get hurt but, if they can stay active and on top of the markets, there should be good opportunities.

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