YORKTON, Sask. – Farmers should have a chance to sell this year’s oat crop, and next year’s as well, at good prices.
That was the message Randy Strychar of Ag Commodity Research gave those attending the Prairie Oat Growers Association Conference in Yorkton Dec. 2.
“There’s lot of good news coming down the road for oat growers,” he said.
“This will be a full blown bullish presentation.”
Strychar said that should be good news for growers after the difficult crop conditions of 2010.
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“To say this was a challenging year for oat growers in Canada would be an understatement.”
However, the challenges in getting this year’s crop planted and harvested has helped push up prices .
“There’s near record low Canadian oat year-end stocks,” said Strychar.
That is reflected by near low stocks of the Canadian crop, and drought in the former Soviet Union and areas of Australia.
The low stocks are aided by record low U.S. oat production. European production is also low and Strychar noted that trend is likely to continue.
“I don’t see them as a longer term threat … to the Canadian oat market.”
The tight stocks have resulted in current “cash asking prices … 90 cents above the five-year average,” he said.
Similarly, the Chicago Board of Trade oat futures are up more than 90 percent since June.
While those are positives for oat prices, Strychar said “commercial oat demand is mixed.”
Cereal consumption has been in decline for years.
Similarly, demand for oats for the American equine sector has also softened and that is a major feed market for the crop.
Still, Strychar said farmers can expect to find good prices at least in the short-term.
“You’ll get a chance to price your oats higher moving forward.”
Millers are having a hard time finding oat supplies and haven’t forward purchased stocks.
“Oat millers have plenty of buying to do … between now and the first Manitoba harvest (next fall),” he said.
Looking ahead to the 2011 crop, Strychar said a huge factor will be how many acres of oats Canadian farmers plant.
A 10 percent increase in acres would remain bullish in terms of price expectation, but if the acres were to grow by 25 percent or higher, it would send a signal that would push prices lower.
Oats processed into many forms
•WHOLE OATS: The kernel has a hard outer hull that must be removed before it is eaten
•OAT GROATS: Whole oat grains with the outer hulls removed but bran layer intact
•STEEL-CUT OATS: This is made by
passing groats through steel cutters. Since they still contain the whole grain including the oat bran, they are nutritious
•ROLLED OATS: These are made by steaming groats and flattening them with a roller
•INSTANT OATS: This is steamed longer and rolled more thinly than rolled oats for use in instant porridge
•OAT FLOUR: Can be ground into flour but lacks gluten, so it is often mixed with wheat flour
