At more than C$7 per bushel for rye in Western Canada, Cal Vandaele of Vandaele Seed in Medora, Man. believes the price has topped off.
“There’s been bids touching C$8,” Vandaele said, adding the price will decline over the winter.
“When they start getting into these levels all buyers are going to be hand-to-mouth. Nobody is going to want to be owning too much inventory at these levels.”
Vandaele said prices last December-January were approximately C$4 per bushel and by the spring they reached the mid C$5 range, continuing upward.
He explained the increases were driven by two factors when it came to seeding last year. One was the moisture levels in the ground weren’t conducive to seeding. The other was low prices the previous yea turned off producers from considering rye and reducing supply.
Since then there’s been a third factor that’s come into play, according to Vandaele.
“The saving grace (of) this year’s crop is its good quality. Prices have reacted quite aggressively.”
However he noted as winter progresses the price of rye will decline.
“I think the market is probably starting to peak out. If you look at a lot of companies’ new crop bids, they’re nowhere near those numbers you’re seeing. New crop bids are in the C$5.50 to C$6 range.”
Rye production in Canada during 2018 was down significantly. According to Statistics Canada, as of the September model-based report, production fell by more than 39 percent to 207,000 tonnes, marking the country’s smallest crop since 2002 when Canada produced 133,800 tonnes of rye.
Saskatchewan had the largest decline, seeing its rye crop plummet by 68 percent down to 36,200 tonnes. Manitoba was close behind with a 64 percent drop resulting in 47,200 tonnes. Things were less severe in Alberta, with a decline of 17 percent for 27,900 tonnes.
Going against the grain were Quebec and Ontario. Quebec’s rye crop jumped by 27 percent to 19,100 tonnes, while Ontario’s crop, the country’s largest in 2018, skyrocketed by 59 percent to 76,500 tonnes.
There may be updated fall acres for rye in the coming months.