Early sales best for rye
Rye producers should consider lining up markets for some of their production before harvest this year.
There are expectations of a bigger prairie rye crop in 1998. Government forecasters say about 25 percent more rye went in the ground this fall on the Prairies.
Tom Allen, associate professor of agricultural economics at the University of Saskatchewan and program manager for the Saskatchewan Winter Cereal Growers, says judging by conversations he has had with growers, that number could be even higher.
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The reason is that several years of small crops in Canada and the U.S. have drawn down stocks and prices have been good.
Allen says there are two markets for rye – the premium-priced flour and distilling markets and the lower-priced feed market.
With small crops, a large percentage of the rye harvest has gone to human consumption markets. But that market is what economists call inelastic. Price makes little difference to the amount of product purchased.
Even though prices could be lower because of a bigger crop next year (so long as there isn’t much winterkill), millers and distillers won’t buy more.
So the expanded production will have to find a home with livestock feeders.
Tests show rye has a nutritional value about half way between feed wheat and barley. However, it has palatability problems so feeders tend to want to pay less for rye.
Because it is fall seeded, rye is one of the first crops harvested. It is available when feed markets often see a price spike because there is little old crop around and weeks to go before new crops are harvested.
It might be a good idea to secure some sales right from the combine during that high feed grain market rather than binning it, Allen said.
Meanwhile, it is becoming clear rye faces an uncertain future if growers don’t do something to get its acreage back up to levels of a decade ago.
A committee was formed a year ago to investigate creation of a rye council to promote the crop, encourage research and find new markets.
For example, new varieties that are more palatable and less susceptible to ergot would create opportunities in the feed area.
Tom Burwell, who heads the committee, said there have been advances but there are still obstacles.
One is how to finance council activities. Usually, a producer checkoff collected at an elevator provides money for such organizations, but lots of rye doesn’t make it to an elevator.
Burwell is optimistic a solution will be found.
