Higher prices could lead to higher acreage for one of the Prairie’s lowest profile crops.
Rye prices are nearly double what they were a year ago at this time, something industry officials say should result in more rye going into the ground this fall.
When harvest began some weeks ago, prices for quality rye were $3 to $3.30 a bushel, up a dollar from last year. The price has continued to climb and now sits at around $4 a bu.
“The market has powered up faster and harder in the last couple of weeks than anybody anticipated it would,” said Cal Vandaele of Vandaele Seeds of Medora, Man.
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“I suspect overall rye prices will remain relatively strong going ahead.”
Because the cost of growing rye is minimal, those high prices should pencil out well for producers.
“There is no question rye is a very profitable crop at these price levels because it requires very little inputs in the way of chemical or fertilizer,” said Vandaele, who calls himself the Rye Guy on the company’s website.
As a rule of thumb, it takes revenue of $80 to $90 an acre to break even growing rye. A yield of 40 bu. at a price of $4 would produce gross revenue of $160 an acre.
“At $4, guys will plant,” said Vandaele. “There’s certainly interest out there.”
Agriculture Canada says 420,000 acres were seeded to rye last fall, down from 677,000 the year before. The decline was due to low moisture in the fall and high stocks.
Analyst Joe Wang projects higher prices for 2007-08, citing tight domestic supplies and support from strong world grain markets.
The International Grain Council projects world rye production in 2007 to be 15.2 million tonnes, up from13.2 million tonnes last year. However, North American production is forecast to dip to 500,000 tonnes this year from 700,000 tonnes in 2006.
Agriculture Canada forecasts domestic rye production at 277,000 tonnes, down from 383,000 in 2006.
Carry-out stocks on July 31, 2008, are forecast to be tight at 60,000 tonnes, less than half of the 130,000 tonnes in store at the end of 2006-07.
However, Jake Davidson, executive director of Winter Cereals Canada, said he doesn’t put much stock in Agriculture Canada’s rye numbers.
He said the recently formed Saskatchewan Winter Cereals Development Commission, which collects a research checkoff on sales of rye, winter wheat and triticale, has had a difficult time figuring out who grows rye, let alone specific production and usage numbers.
“I don’t think there’s a very good handle on this crop out there,” he said, adding rye growers tend not to talk much about the crop.
“They put it in the ground and then forget about it,” he said.
“They don’t spray it, they don’t do anything except wait for spring, maybe put a little fertilizer on and then wait for harvest.”
