U.S. millers have two-month supply on hand | Rail transportation backlog must be addressed before oat stocks run out
American millers likely have 60 to 75 days worth of oat supplies, so statements about companies running out of oats in three weeks is erroneous, says an industry analyst.
Saskatchewan premier Brad Wall said last week that General Mills won’t be able to produce Cheerios in 15 to 20 days because the company can’t obtain sufficient oat supplies from Western Canada.
Randy Strychar, an oat industry analyst and grain trader in Vancouver, was surprised by Wall’s comment.
“This statement, that General Mills is going to run out in 15 days, I don’t know how they (Saskatchewan government) got the data,” Strychar said.
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“Each individual company (miller) will vary, depending on what their supply situation is…. We don’t know exactly where they are. We can only estimate.”
In commentary sent to oat industry players March 2, Strychar said U.S. mills grind 127,000 tonnes (8.75 million bushels) of oats a month.
“Based on our estimates, the millers have access to roughly 16.9 million bu. or 244,000 (tonnes),” he said.
“Based on our very rough estimates, we believe the U.S., without additional shipments from Canada, will deplete available oats supplies in 60 to 75 days.”
Strychar said during a grain industry conference in Winnipeg in late February that U.S. millers could use up their oat supplies by April.
“If we can’t get rail cars down to them, they’re going to run out of oats,” he said.
“We are very, very close to running these mills out of oats.”
Catherine Jackson, a General Mills spokesperson, said the company is grateful for Wall’s comments, but the 15 to 20 day estimate isn’t accurate.
“We have more flexibility than that, but we appreciate the premier calling attention to this issue. Reliable transportation and logistics are important to the entire industry and are obviously important to Canadian farmers.”
U.S. oat millers have struggled to acquire sufficient oat supplies from Western Canada for several months because of the rail service backlog on the Prairies this winter.
Consequently, oat stocks at U.S. mills have dropped significantly and rumours of possible plant shutdowns are circulating within the grain trade.
