Statistics
Agriculture Outlook 2001 Grains, Oilseeds, Special Crops COARSE GRAINS - RYE

The low price of competing feedgrains has kept world production of rye at a fairly low levels over the past three years, with about 20.5 million tonnes in ‘2000/01 (19.9 in ‘99/00, 20.9 in ‘98/99, 25.0 in ‘97/98), well below the 37.9 million of ‘90/91. European countries (east and west) produce most of the world’s rye, with much smaller amounts grown in Canada, the US, Australia, and elsewhere.

The EU-15 produces 25-30% of the global rye crop. EU production has been at historically high levels since ‘95/96, with about 5.52 million in ‘2000/01 (5.5 in ‘99/00. There are larger 2000 rye crops in Scandinavia, with 184,000 tonnes in Sweden (117,000 tonnes in ‘99), and 103,000 tonnes in Finland (34,000). The Russian Federation produces another 25-30%, and had a much larger crop of 5.64 million tonnes in 2000, compared to poor crops the previous 2 years (4.78 in ‘99/00, 3.27 in ‘98/99).

Eastern Europe’s domestic rye demand is also met almost entirely by western European production now, much of it from Germany or Finland. Current EU rye supplies are ample. EU carryover has been persistently high in export or government "intervention" stocks. The expansion of the EU into Eastern Europe is expected to result in much larger EU rye production potential. In the short-run, however, sizeable European exports of low-prices intervention rye into countries like Poland have disrupted local markets and trade relations. Poland’s rye production dropped to 3.94 million in 2000, the lowest level since ’92 (5.18 in ‘99/99).

Although rye is heavily used as a feed grain, it has a major use in whole-grain products or in bread across northern Europe. The former Soviet Union was a major market for Canadian rye in the past, but supplies from Germany and/or Finland were heavy from late-1999 on, and replaced much of Canadian product. EU food aid to Russia tends to include rye. Major export markets also include S. Korea, Japan, and China. Cost-conscious importers generally shift from higher-priced feed wheat to lower-priced rye and corn; however, all the major producers have large supplies of feed wheat to sell. S. Korea generally purchases large amounts of EU rye (has tended to buy the equivalent of about 2 million tonnes of feed-quality wheat and 8 million tonnes of corn, mostly US).

In North America, the rye content in the more common light rye breads is about 20 pounds of rye for 340 pounds of bread (one-cup rye to 17 cups dough). There is little Canadian production of dark rye bread or of consumer-packaged fine or coarse-milled rye flour, partly because of the effect of rye's oil content and flavour on the milling process, although niche market domestic demand appears to be increasing. Rye contains substantial amounts of soluble fibre. Rye’s flavour is required in rye whiskey manufacturing, although rye comprises only about 5-6% of the grain mix or mash. Clean rye as a feed tends to be used primarily in mature hog rations.

Rye as a cover or nurse crop may also have some benefits in reducing pesticide use and in biological pest control. Fall-planted rye can be used as a minimum tillage and nurse or ground-cover crop. Agriculture Canada research in Ontario has shown that rye residue provides protection for processing tomatoes from late spring frosts, summer heat, wind-erosion on sandy soils, prevents some nitrogen leaching, provides a habitat for ground beetles that are prey on the Colorado potato beetle, and has a scent that apparently confuses the potato beetle's tomato-eating habits.

US rye production has been dropping in recent years. The crop totalled only 208,000 tonnes in 2000, down 22% in 1999’s 280,400 tonnes, after large crops the previous 2 years (279,240 in ‘99/00, 308,900 in ‘98/99, 206,560 in ‘97/98)! Planting reached 1.34 million acres, but harvestings in 2000 were about 302,000 acres. Only 22-27% of the total rye acreage of about 2-3 million acres is generally harvested for grain, with the rest used as forage or cover crop. The US uses about 210-240,000 tonnes for food and beverage industries, and about 125,000-185,000 tonnes for feed. Approximately one-third of US domestic rye requirements have been met with imports from Canada and/or Scandinavia. US imports have been constant in the 75,000 tonne area from ‘98/99 on, and are expected to be the same in ‘00/01 (118,000 in ‘97/98, 137,000 in ‘96/97).

The Canadian rye harvest dropped off by about one-third to about 247,000 tonnes for 2000/01(386,600 in ‘99/00, 398,100 tonnes in ‘98/99, about 300,000 tonnes in preceding years). Manitoba's rye crop was down to 27% to 55,900 tonnes (76,200 in ‘99/00, 106,700 in '98). Canada's rye exports are generally split between the US and Japan, with small amounts to South Korea. Export and domestic demand has been brisk in early 2000/01, in comparison to some slowness in previous 2 years. With the increased demand for alternate, good-quality, and early-harvested feeds, Manitoba’s rye carryovers have been low or non-existent for several years.

Price:

European rye from Germany was released from intervention stocks in early December 2000 (13,540 tonnes at a minimum sales price of 85.72 Euros/tonne). (In October/November 1999, European rye was reportedly priced as low as US$75/tonne at Korean ports, after a US$65/tonne export subsidy.) Rye tends to be substituted for other feedgrains, including US corn and feed wheat, because of its lower prices, despite its lower feed value.

Canadian rye prices continue to be pressured by the low prices of other coarse grains, and the lower demand in the US. Rye has not been traded on the Winnipeg Exchange since 1995. Local Manitoba rye prices for rye destined mainly for the US milling market (with good falling numbers) previously priced double the value of other sales of #1 or #2 rye. Since ‘98/99, however, there appear to have been few milling premiums offered, and top-quality has generally been $63-77/bushel for good #1 or #2 in Manitoba. Feed qualities have generally been $47-63/tonne ($55-63 for good feed in early ‘98/99, $80/tonne or $2/bu for feed and $3.50-/bushel for milling quality in ‘97/98). In much of 2000/01, in December 2000 and early January 2001, #2 rye was priced at a base price of about $75/tonne, up $5/tonne or so from ‘99/00.

Outlook:

Canada's fall rye plantings for 2001/02 are down 2% to 404,600 acres (414,900 planted for '2000/01, 515,900 for ‘99/2000). Manitoba's fall rye plantings for 2001/02 are unchanged at 60,000 acres (85,000 acres in for '99/2000, 120,000 for '98/99). US plantings are expected to be unchanged to lower because of the late harvest and moisture last fall. With the lower prospective supplies and early harvest date, rye prices in 2001/02 should improve in the area of 5-15%, still at very low levels. Early harvestings of fall-planted feed grains are likely to be in demand in Manitoba in spring 2001. The resumption of a milling premium will require a drawdown in US and competitor high-quality carryovers.