Wheat’s recent price rally might have attracted some acres from other crops, but not from oats, experts say.
“Oats have been a very good crop for farmers,” said Prairie Oat Growers Association president Bill Wilton, a Winnipeg area farmer.
“They haven’t been a big moneymaker, but you’ve been able to pencil a small profit out of it in the last couple of years.”
Generally poor price outlooks for most prairie crops have analysts in a speculating frenzy about what farmers will seed this spring. Some suspect there will be more canola even though its price has been weak all winter and there appears to be little chance of the canola supply glut disappearing. That’s because higher yields from hybrid varieties mean that many farmers can now profitably grow canola at a much lower price than five years ago.
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But others think farmers are unlikely to chase canola returns when other options carry less risk and better price potential.
“The wheat looks friendliest of all the crop outlooks,” said Randy Strychar of Ag Commodity Research, who thinks wheat and oat acres will increase this year.
“More anything (with) high input cost I just don’t see,” said Strychar.
“Oats are basically a weed. Throw it in the ground and unless you’re really going to scorch it in July, it’s going to give you a decent return.”
The size of the oat crop is hard to peg because of unusual conditions in Manitoba and eastern Saskatchewan, where the bulk of the milling crop is produced.
In Manitoba, flooding this spring and the lingering effects of soil saturation last summer make the picture murky.
But Wilton said he thinks the floods aren’t a real problem and the saturation problem is disappearing.
“I don’t think the flooding will change anyone’s plans,” said Wilton as the Red River crested in the Winnipeg area.
“And outside the flood zone, things are actually drying up very well. There’s a lot of optimism in the air.”
In Saskatchewan, no one knows how much farmers plan to seed, Strychar said. Estimates have varied widely and everyone is waiting to see Statistics Canada’s seeding intentions report on April 25.
Oat prices were one of the brighter points of a generally dismal winter marketing season, but recently they haven’t kept up with the surge in wheat prices.
Wilton said oat buyers don’t see any need to buy acres.
“They’re not reaching for anything. They hear the same talk about larger oat acreage this summer that we do,” said Wilton.
And the Canadian Wheat Board’s fixed price contracts may have helped corral some extra acres for wheat at the expense of oats, Strychar said.
“I think the board contracting programs probably pulled some acres into wheat and away from other crops,” he said.
But oat prices are still reasonable compared to most crops, so no one should be expecting to see a wide scale abandonment of oats.
“You’re certainly going to get more oats acres,” said Strychar.
