North American farmers top up rye plantings as whiskey sales soar
WINNIPEG, Manitoba (Reuters) – North American farmers are turning back to a neglected crop, sowing fields with the largest rye crop in years partly as consumers satisfy a growing thirst for whiskey.
Rye, planted in autumn and harvested in mid-summer, fell out of favor during the past decade as other crops produced bigger profits. But whiskey demand as well as new varieties of rye that offer greater yields have renewed interest.
US farmers planted 1.76 million acres (7 million dunams) for the 2016-17 season, the biggest area since 1989 and a 12 percent year-over-year increase, according to the US Department of Agriculture.
In Canada, a major rye exporter along with the European Union and Russia, farmers sowed 405,900 acres, the biggest rye area in seven years, Statistics Canada reported.
“In our area, no one would have even considered rye,” Manitoba farmer David Hamblin said, citing its unprofitableness compared to other crops. “I think it’ll be a fixture for years to come.”
Rye is also used in animal feed and as a “cover crop” to prevent soil erosion.
Demand from bread millers and distillers has been a main driver of the crop’s resurgence, said John Pauch, an analyst of coarse grains at Agriculture and Agri-Food Canada. He expects Canadian exports to nearly double in 2016-17.
US whiskey sales rose 9% on the year to June 18, to $4.1 billion, topping the 6% demand growth for total spirits, according to Nielsen data provided by Beam Suntory Inc., the distiller of Jim Beam whiskeys.
Rye whiskey’s 33% growth outpaced both categories, albeit at a more modest $94 million.
Consumer demand for whiskey has left distillers such as Brown-Forman Corp.’s Jack Daniel’s hustling to keep up, given whiskey maturation can take four to seven years.
“Years ago, we probably underestimated the market,” said Jeff Arnett, the master distiller at Jack Daniel’s.
Distiller Jim Beam has added several new rye whiskey brands recently, including a 100% Canadian Club rye whiskey.
The pickup in supplies has already diminished prices and may limit farmers’ enthusiasm for planting rye this autumn, said Blake Gamroth, a Canadian rye merchant at Scoular.
The average US farm price of rye has declined two years in a row, although the $6.52 per bushel farmers earned in 201516 was still 26% higher than five years earlier, according to the USDA.