At more than $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 $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 about $4 per bushel and by the spring they reached the mid-$5 range and continued upward.
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He said the increases were driven by two factors at seeding time last year: lack of moisture in the ground and producers being turned off from seeding rye because of low prices the previous year.
A third factor has now come into play, said Vandaele.
“The saving grace (of) this year’s crop is it’s good quality. Prices have reacted quite aggressively.”
However, prices will decline as winter progresses, he said.
“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 $5.50 to $6 range.”
Rye production in Canada during 2018 was down significantly. According to Statistics Canada, 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.
