By Harry Siemens – The Canadian International Grains Institute reports buyers of Canadian grain, both international and domestic, are expressing concern over increasing costs.

With the North American ethanol industry growing so rapidly, the grains industry has found it difficult to keep up with demand for both grain for fuel and grain for livestock.

CIGI Director of Feed, Dr. Rex Newkirk says the ethanol demand is driving up corn prices dramatically prompting the livestock industry to move to byproducts and other grains like barley pushing up barley prices causing the concern.

“There are always winners and losers in everything that happens and right now we’re in a fortunate position where farmers are gaining value out of the grains because of the ethanol industry,” says Newkirk.

He says the quickness of it happening is causing concern about what will happen in the future and whether growers can produce enough for both industries. And if not how will that settle out as far as competition between them.

“Most of the concern is around the livestock industry, particularly in Canada where we’ve relied very heavily on barley,” said Newkirk. “People are seeing these increased prices and they’re not sure how long that will last and they may even go up some more in the future.”

This is also happening internationally. He spoke with a food barley buyer from Japan recently who expressed real concerns about having to compete with the ethanol industry indirectly. Their barley prices have gone up and they’re worried this may continue in the future and could make it more difficult for them to use Canadian grain.

Newkirk says, as buyers see the rising cost of these materials pushing up their input costs, they begin to worry about further increases and whether they should be looking at other types of grains.

He notes, when rapid changes occur, it’s always difficult to adjust and there’s always fear about what will happen in the future.