SASKATOON – The Canadian oat industry is at a crossroad, with one track leading to a bright future and the other to marginalization, says a prominent crop analyst.
Randy Strychar of Statcom Commodity Information of Vancouver says producers must press researchers to improve oats’ feed value to make it more attractive, or it will fall to special crop status.
Oat production is falling everywhere but in Canada, Strychar told several hundred oat and barley researchers at an international oat conference hosted by the University of Saskatchewan last week.
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If the trend continues, the infrastructure that serves the crop, such as the Chicago and Winnipeg commodity markets’ oat futures contracts, will collapse and grain companies will cut storage space allocations and marketing efforts, he said.
Oat production nosedive
Since 1960, there has been a 45 percent drop in world oat production while corn and wheat have more than doubled.
Most of the drop is the result of tractors replacing horses in agriculture. Oats rarely makes its way into feed rations for other livestock because of its relatively low nutritional value and high hull content, he said.
“There has been some decent work done on the human consumption side, but virtually nothing in the last 35 years has improved dramatically the feed value of oats,” he said.
“Human consumption oats gets all the headlines, but if we don’t grow large quantities to be used by the feed industry, we won’t have a crop to deal with in years to come.”
Such gloomy talk might seem surprising, given that the largest Canadian oat crop in decades – almost five million acres – is now growing. Market prices are good.
The strong Canadian oat market is tied to a record low American crop.
The decline south of the border is due in part to federal farm legislation that favored other crops.
“The U.S. is the largest oat user in the world, but an unfriendly U.S. farm bill did more to kill oat production than the introduction of the tractor,” he said.
Also, Scandinavian oat exporters are largely out of the U.S. market, concentrating instead on the European Union. Australia, the only other major oat exporter, is barred from the U.S. market because of perceived crop disease problems.
A few U.S. grain companies have turned to Canada to get their supply and a good system of production contracts has developed, Strychar said.
“(They) have been solely responsible for the sharp increase in Canadian production over the last 10 years.”
These companies have contracted nearly 85 percent of the oats produced by Canadians, sometimes as much as a year ahead.
Canada can dominate the world oat trade, but it is a declining market if better feed varieties are not found, he said.
“The oat trade is alive and well, but needs nurturing if it is to survive.”
