For several years now agricultural enterprises have experienced the impact of market globalisation. In major crops such as oilseed rape and wheat domestic market prices have long ceased to be determined solely by local market conditions.
Rye, however, still remains predominantly a regional product. The global exchange of goods and thus, its significance for price formation is still of great importance.
Consequently, a production that clearly exceeds human consumption quickly leads to decreasing prices.
Rye is increasingly accepted as animal feed. There is a constant demand for rye as foodstuff as it is very popular amongst consumers. Those who want to process and eat rye flour are also prepared to spend more money. If there is a shortage in supply the wheat price is no longer the benchmark and the consumer is prepared to pay prices above wheat level.
Consequently, rye prices cannot always be quoted on the basis of the wheat price. A reliable prediction is not possible. Various market analyses can help to form one‘s own opinion.
Marketing planning is not all about maximising sales. It is about choosing marketing and use strategies that cover costs and ensure liquidity. Especially as there are many possibilities to use rye the question of the best farmspecific utilisation strategy arises.
Feeding or Selling
Like anything else, when goods are sold there are advantages and disadvantages to every marketing strategy.
Timing of sales depends very much on operational factors like liquidity, risk and storage capacity. Rye is often sold at harvest due to lacking storage capacity. There is no sales volume risk but there is the risk of price volatility. Prices at harvest are often affected by harvest conditions. Storing rye should be considered if storage facilities are available. Livestock farms have to decide whether to feed or sell their home-grown rye or to purchase rye for feeding. There is a simple method to approach this topic – the calculation of the reference value (value for money according to Löhr). The calculation of the exchange value refers to energy density and the first limiting amino acid, the digestible lysine as well as the current market price.
Example: At a wheat market price of 180.0 Euro/t the exchange value of rye is 175.5 Euro/t. At this price rye is equivalent in regard to the main feed value characteristics. If the market price is higher rye should be sold. The average price difference is rather at 20 to 30 Euro/t. In pig fattening it makes sense in any case to feed home-grown rye in order to save feed costs.