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Where the Wild Things Grow

January 11, 2012
By: Ed Clark, Top Producer Business and Issues Editor
wildrice1
Growing cultivated wild rice can be a high-stakes gamble, says Peter Imle, advocate for wild rice production and a farmer in northern Minnesota. A grass like wheat, barley and rye, wild rice is more prone to shattering from weather damage.  
 
 

Minnesota is cutting edge of cultivated wild rice

In the spring, when the prairie ground is covered with water and wild rice pokes up from
cultivated paddies, it feels like you are walking through Thailand or Vietnam rather than Minnesota. Yet once the diked paddies are drained in preparation for harvest, the rice appears northern indeed, much like a field of prairie grass with its heads of grain rippling in the breeze.

The genesis of cultivated wild rice took place just decades ago in central and northern Minnesota. Today, growers there lead the nation in taming this wild crop for profit.

Peter Imle heard the call of the wild in 2004 and came home to farm wild rice on his family’s land near Gonvick, Minn. He is an advocate for the often misunderstood crop and currently serves on the board of the Minnesota Cultivated Wild Rice Council.

"Growing rice may not seem like a high-stakes gamble, but it is," Imle says. When everything goes right, he adds, cultivated wild rice can generate more profit per acre than row crops. But when production goes even slightly wrong, it can destroy profits for the year.

Despite advances in cultivated wild rice varieties since the industry emerged in the 1960s, the crop is still more shatter-prone than other small grains. Like wheat, barley and rye, it is a grass. High winds can cause yield losses of 25% to 40%.

Marketing risks are also monstrous. Wild rice is a gourmet food, with demand largely determined by the vagaries of the global economy, even more so than corn, soybeans and wheat. There are no hedging tools available; it is all grown on contract, with prices normally set six to eight months prior to the August harvest.

"Wild rice prices can be more volatile than other crops; take the price variability in commodity markets but remove the risk management tools," Imle says. For 2005 to 2010, market prices gyrated from 95¢ per pound to $2 per pound and back again.

The Rush of Risk. Some called cultivated wild rice "black gold" in the early days of the crop, and its history sounds a bit like that of the Gold Rush. A number of innovators such as the Godward brothers in Aitkin County, Minn., took the plunge after wondering if wild rice could be grown in paddies similar to those of its distant cousin, white rice, in Asia. They were the first to develop wild rice paddies, in 1950 to 1951. The Godwards succeeded, creating a brand new industry—the latest wild crop to be tamed.

wildrice chart

What caused the industry to explode, however, was the development of a wild and white rice blend developed by Mars Inc.’s Uncle Ben’s brand in the 1960s. Demand for the rice far outstripped supply and Uncle Ben’s began contracting with growers, paying as much as $8 per pound for processed wild rice. "When news of this price got out, the rush was on. Paddies were being developed everywhere," says Ervin Oelke, a University of Minnesota agronomist who wrote the book Saga of the Grain. Today, 80% of wild rice is used in blends.

"Early growers were adventurous enough to try something different," says John Gunvalson of Trail, Minn., who began growing wild rice in 1971 in a partnership with Imle’s father, Paul. He says that one thing growers had in common was their spirit of adventure, noting that a high percentage of these innovators flew airplanes. Today, custom airplane applicators play a key role in wild rice production; urea is put on with planes in July, after the fields are flooded.

Not only has wild rice brought industry to land that was not being farmed—that in fact was a wasteland as late as 1960—but it eventually brought in other crops as well, due to the land being improved and leading the way for agricultural development.

In the mid-2000s, demand was increasing faster than production, creating high prices. While U.S. demand was growing, wild rice use was expanding even more rapidly in Europe, Imle says.

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An early adopter of wild rice in 1971, John Gunvalson, Trail, Minn., has grown the grass every year since. He rotates it with soybeans, potatoes and wheat.

"Rice was in short supply and production ramped up, both in Minnesota and California," he adds. Those two states account for 90% of wild rice production, each producing about 50% of the nation’s total. The U.S. produces 95% of global wild rice. Moreover, cultivated wild rice production far exceeds lake-grown wild rice in Minnesota, totaling 6 million pounds versus 250,000 lb.

Big Crash in 2008. With such strong prices in 2005, production began rapidly increasing, reaching 60% more cultivated wild rice acreage by 2008, the same time that yields increased. Then one of the biggest crashes in the history of wild rice markets occurred as the global recession hit. After exports of U.S. wild rice more than doubled in the early part of the decade, demand turned around, falling 44% from 2008 to 2009.

The industry is just now starting to work its way out of the over-supply situation, says Beth Nelson, president of the Minnesota Culti-vated Wild Rice Council.

The price crash led to a decline in Minnesota acreage from 18,000 in 2008 to 10,000 in 2010. Imle cut back his production by 40% in 2009, converting more production to other crops he rotates with wild rice. His wild rice acres are based on market demand.

Moving forward, Nelson believes, the industry will grow but only modestly. "Growers don’t want to get back in the situation where they were in 2008," she says.

Another factor deterring growth is that it is far more difficult today to obtain the necessary irrigation and drainage permits to construct and maintain wild rice paddies than it was when the pioneers were developing the industry, Imle says.

Among the many challenges for growers is that wild rice is harder to grow and takes more up-front money. "It’s a unique crop, extremely capital-intensive," Imle says. "You have to modify combines and build complex dikes and drainage systems to remove water. It’s also labor-intensive and susceptible to weather."

The potential for strong profits is the tremendous upside and a powerful motivator to stick with
the rather temperamental crop, Imle acknowledges.

Equipment for growing and harvesting wild rice is far more expensive than equipment for other crops because it all has to be modified, Imle adds. Standard combines go through an extensive conversion to steel tracks that can cost as much as $100,000. Growers also need more combines and other equipment than their row crop counterparts because the window to harvest wild rice is so small. Combines are used only 90 or 100 hours, and then they sit idle the rest of the year.

On the plus side, wild rice thrives in water that can damage other crops. Water needs to be 1' deep to keep weed pressure down. "You can lose a potato crop with too much rain, but it will not hurt wild rice," Imle says. By growing wild rice, potatoes, soybeans and, most recently, peas, Imle feels he has a hedge against the weather.

Growing wild rice requires extensive maintenance of a system that uses water pumps for irrigation and tile systems for drainage. This allows for the constant monitoring of water levels throughout the season.

Yield Advancements. Rice yields have surged since the late 1990s, from 300 lb. processed per acre (statewide average) to 500 to 600 lb., notes Raymond Porter, a wild rice breeder at the University of Minnesota. That’s due to improved varieties and crop rotations.

Porter sees the possibility for major yield advances in the years ahead. "We’re looking at making semi-dwarf varieties, similar to wheat and other forms of rice," he says. "The plant is now 6' to 8' tall. We’re trying to reduce it to 4' to 6', so more energy goes into the rice."

Despite advances, shatter continues to be a major issue, he adds. "We only started doing research on wild rice in the 1960s and 1970s. There is still a lot of wildness in it."

Imle credits his father’s management, financial and operational skills, as well as reducing risk through diversification, for his operation’s sound financial footing today. Crop diversification is the key way he protects himself against the ups and downs of wild rice yields and markets.

"Because of the high level of risk, you need a high level of capitalization for a high level of comfort," he says. "You need to be able to pay down debt. The farm hasn’t always had the financial stability we have now. Despite the downturn in the wild rice economy since 2008, banks have been loyal. We have sufficient credit available locally, when necessary."

Even though the wild rice industry can be boom or bust, Imle has added more land in recent years and continues to look for growth opportunities for his 5,000-acre farm. "I’m always looking to expand," he says.

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FEATURED IN: Top Producer - January 2012

 
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