Rye is a “Hot Commodity”

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Rye is a “hot commodity”.

That is, rye whiskey is a “hot commodity”… but rye grain as a commodity is a different story.

Rye is not something that a farmer necessarily wants to produce in large quantities anymore. There are several reasons for this.

 

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First, rye isn’t generally a high dollar yielding crop. At best, it will produce 40-45 bushels per acre. While the input costs (fertilization, pest control, etc) are not as high as other crops, the return per acre is still relatively low compared to corn and soybeans in the US and canola, malting barley, wheat, flax, yellow mustard (the list goes on and on!) in Canada.

Second, rye does not have the the array of end-users that other crops do. It can be said that the distillation industry is expanding, but not at a rate that impacts demand in the same way that the expansion of ethanol production impacted corn demand. We have seen the demand for corn explode in the last decade due to in part to the expansion of the ethanol industry’s capacity. Distillation capacity is somewhat finite; there are large distilleries being built for beverage alcohol purposes, but these facilities will produce several products, not just whiskies that use rye in the mash bill.
The only other major outlet for rye is the milling industry – but the milling industry has strict quality specs that are often not met if there is crop damage.

Third, rye is not necessarily the easiest crop to grow. It grows best with moderate temperatures and longer sun hours during the summer (north of the I-80 line in the US). And it grows well in dry conditions. In essence rye is a weed. But varietals that are widely grown have a very tall stalk. At harvest, the producer must first swath (cut the rye down and let it dry in the field) an come back about a week later and harvest the grain. This must be done in dry conditions or quality is impacted materially; a weather event, even a rain shower, is likely to cause sprout damage. Sprout damage impacts milling capability. If sprout damage is present, essentially half of the available market outlets are now unavailable to the farmer.

This hasn’t necessarily always been the case, though. Rye acreage has been declining in North America for many years now. First we saw a decline in U.S. acreage in favor of corn, soybeans, and wheat. We are now seeing the same issues in Canada. In the coming weeks I will be addressing rye in depth. From its origin in Southwest Asia millennia ago to today and from the farm to the end user.

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