Canada increases US corn purchases

High barley prices are turning Canada's rare buying activity of US corn into a habit.

As the price of grain used to feed livestock soared, farm owners were forced to switch to American corn as a cheaper substitute for barley. The shift came a year after Canada's grain stocks were depleted following a severe drought. Trade flows have changed as well, making Canada one of the largest buyers of corn from the US Midwest.

According to Jacob Bueckert, chair of the Alberta Cattle Feeders’ Association, farmers are in massive need of corn to fill a supply shortage.

Buckert said that buying barley from the Canadian Prairies is now more expensive than buying corn from the Dakotas or Minnesota. He noted that the cost of delivering grain within the country is also increasing because Canada lacks truckers.

In some Canadian provinces, barley prices have risen 30% since August and are trading near 2021 record highs. Back then, the volume of the nation’s harvest was the second lowest since 1967.

Jerry Klassen, market analyst and commodity trader at Resilient Capital, noted that this season, Canada will import up to 3 million metric tons of US corn. According to the United States Department of Agriculture (USDA), this is the second largest volume since 2008. USDA data shows that exporters sold 48,000 tons of US corn to Canada during the last reporting week.