MarketsFarm — Increased demand, both domestically and overseas, has caused the price of oats grown in Western Canada to rise compared to last year.
And so far, seeding projections and rising prices for other crops suggest the market for oats won’t go down anytime soon.
According to Prairie Ag Hotwire data from Wednesday, high-delivered bids for oats were $3.72 per bushel in Saskatchewan, $4.35 in Manitoba and $4.55 in Alberta, all at least 55 cents higher than last year.
Up to last January, Canada has exported almost 1.04 million tonnes of oats this crop year, according to the Canadian Grain Commission. This is a 25 per cent increase from 832,300 at the same point in 2020.
Jenneth Johanson, who serves on the board of the Manitoba Oat Growers Association and resides near Lac du Bonnet, Man., said demand has jumped since the start of the COVID-19 pandemic and has stayed at nearly the same level.
Chile, she noted, has now become the second-largest importer of Canadian oats behind the United States, purchasing 124,900 tonnes since the start of the crop year.
“That’s due to a drought (there) last season and (those purchases are) to keep the mills running,” Johanson said.
Agriculture and Agri-Food Canada’s latest crop outlook from last month predicted 3.71 million acres of oats to be seeded for the upcoming crop year, producing 4.24 million tonnes. These numbers represent a 3.6 per cent decline in acres and an eight per cent drop in production from 2019-20.
“There’s been some industry commentary that (acreage) could be anywhere from five to 11 per cent down. We won’t know until the seeding season has come and the drills hit the ground,” Johanson said. “We’re not sure if the increased value of oats has happened early enough to secure the acres that the industry is going to need.”
MarketsFarm Pro analyst Mike Jubinville said oats are in the middle of a unique time when prices for numerous crops have risen sharply over the past year, creating tight competition for acres.
However, oats benefit from requiring both less overhead costs and less maintenance to harvest. He expects carry-out stocks to dip below 400,000 tonnes going into the next crop year.
“We are in a demand-pull market,” Jubinville said. “For those growers on the ‘oat highway’ along the Yellowhead (Highway) in western Manitoba through central Saskatchewan into eastern Alberta, I think it definitely fits into the mix.
“But to extend acreage outside of the traditional areas and steal acres from other commodities, I’m not necessarily sure it has that inertia behind it.”
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.