Despite lower rye prices, high yields make good returns possible in a variety of market opportunities
Hybrid ryes in Saskatchewan yielded 90 to 100 bushels in 2016 with a top yield of 126 bushels in the southeast.
Hybrid falling numbers averaged 100 to 150 points higher than open pollinated.
Prairie farmers harvested 20,000 acres of hybrid fall rye last year.
Today, 40,000 acres of hybrid fall rye are safe and secure in the ground, buried under the snow blanket, said FP Genetics chief executive officer Rod Merryweather.
Seventy-five percent of hybrid rye grown by FP customers was Bono with the remaining 25 percent Brasetto.
“According to Stats Canada, we had record yields in 2016, which accounts for the weak prices we’ve seen lately. We harvested a big crop,” Merryweather said.
“Price for the rye that’s selling right now has been down around $4, but it’s starting to pick up again. We’re starting to work through that volume, so prices are improving. I’ve heard prices as high as five dollars a bushel just recently, on hybrid rye going for human consumption.”
Merryweather said it isn’t the sort of crop that requires a high price to justify higher input costs. What may be lacking in dollars per bushel is made up for by sheer volume.
“Even if the grade isn’t there, the grower is making a darned good return on yield,” he said.
“This year, let’s say the OP (open pollinated) varieties had an exceptional yield with an average 75 bu., and let’s say the hybrids averaged 100 bu.
“Now, if the crop was at the low end, it would go for feed at $4 per bushel. So that’s $300 per acre for the OPs, which is still not a bad return, but you’re getting $400 on the hybrids.”
Merryweather agreed it’s a waste to use a superior quality grain as livestock feed.
“It’s a shame, but we had oversupply, which brought prices for high quality grain down to where they’re not much different from feed grain prices. But that’s been an anomaly. I think we’ll see the price spread widen to where it should be next year.”
There is a strong trend of current buyers switching from conventional open pollinated varieties to hybrid rye, but price discovery remains a problem. Rye is a small niche market, so it’s difficult finding price quotes.
Merryweather said he knows of rye selling at $4 and similar rye going to a different buyer at more than $5.
To get the price premium, he added, it needs to be a hybrid with a high falling number of 250 to 300 and it must have less than one part per million fusarium.
“Minneapolis is the North American centre of trade for rye and the natural centre for grain collection,” he said.
“There are big millers that use a lot of rye, plus there’s a big distilling industry in that geographic area. It’s a high demand situation because of increasing demand for high quality distilled beverages.
“Here in Canada, Wisers is trying to access all Brasetto for their Windsor plant. Last spring they were trying to buy 7,000 tonnes of Brasetto. I don’t think they got anywhere near that amount.”
Weather dictates grade, he said. There will always be years with off-grade cereals so it’s prudent to develop a feed market.
To that end, FP has embarked on a feeding trial with one of the biggest pork producers in the United States in conjunction with KWS, the German company that owns the FP hybrid varieties.
Approximately 175 producers in 2015 grew FP hybrid rye in 2015, which increased to 250 last year.
Merryweather said half the FP customers are switching from open pollinated rye to hybrids. The other half are new to rye, switching from other crops, and they want to start with hybrids. Another smaller group consists of producers wanting to get out of winter wheat.
“I’d say 100 percent of them have moved to hybrid rye because they see the potential for higher financial returns,” he said.
“Commodity prices have not been tremendous lately, so producers are looking for crops that can earn a bigger profit based on high volume rather than dollars per bushel.”