March 2008

In the August to December 2007 period, direct feed grain purchases by Western Canadian feed mills totalled 427 000 metric tonnes, up 14.0% from the same five months a year earlier.

Reduced purchases of barley, oats and peas, were overshadowed by increased purchases of corn and, to a much lesser extent, of wheat.

Direct corn purchases in the first five months of the 2007/2008 crop year surged to 191 000 tonnes from 110 000 a year earlier. Corn imports by feed mills grew 32.7% to 123 000 tonnes from 93 000 tonnes, supported by a lower US exchange rate. Purchases of Manitoba corn were also significantly higher, the result of expanded production and lower prices relative to other feed grain alternatives.

Direct wheat purchases from Saskatchewan declined because of lower purchases by Manitoba mills that were substituting corn. Wheat purchases from the other western provinces rose in the early part of the 2007/2008 crop year prior to the major surge in wheat prices.

Feed mills' direct purchases of barley fell 27.2% over the period, with reductions in purchases from Saskatchewan and Alberta, as feeders turned to lower-priced corn.

Pea purchases decreased for a second year as a result of strong food demand from India and high prices, which priced peas out of the domestic feed market.

Note: Statistics Canada surveyed feed mills in Western Canada to obtain data on direct purchases of feed grains from farmers and grain dealers by province of origin. These data represent grain deliveries in addition to the licensed deliveries currently reported to the Canadian Grain Commission. Feed lots were not included in the initial phase of this project. The purpose of this on-going, semi-annual survey is to identify the amount of grain delivered by these direct methods and to identify inter-provincial movement of grain. This will lead to improvements in grain delivery data, which are important in the verification of farm stocks and production as well as in the calculation of farm cash receipts.