After rolling through a boom and bust cycle over the past few years, the oat market is searching for stability in both supply and demand heading into the 2024 growing season.
Record high prices and seeded acres in 2022 led to a dramatic decline in prices and production in 2023. Acres are expected to increase in 2024, with oats looking relatively profitable compared to most other crops.
“New crop oats are penciling out pretty well,” notes Lorne Boundy, merchandiser with Paterson Grain, in the interview below. “When you look at some budgets, they’re near the top rather than the bottom. And return wise, they should still present a fairly good premium over wheat and other cereals going into new crop to try and encourage some acreage recovery after last year’s collapse.”
While prices have risen enough to encourage more acres, they’re still a few dollars off of the highs of the winter of ’21-22 thanks to “fairly adequate” on-farm supplies, and a sharp decline in feed demand, says Boundy.
“End-use is down a fair bit, especially in the feed sector. $7, $8 oats was the worst thing that ever happened to the feed industry, as far as just demand destruction. And a lot of that demand hasn’t come back,” he says.
In its February outlook, Agriculture and Agri-Food Canada’s market analysis division projected a 27 per cent increase in seeded oat acres in 2024, at 3.2 million versus 2.5 million last year. AAFC forecasts production will increase by 41 per cent due to more acres and a return to average yields.
Underlining Boundy’s point about demand destruction, AAFC projects feed use for the 2024-25 crop year at 834 thousand tonnes, down from 1.46 million tonnes in 2022-23.
Check out the interview below for more on the oat market heading into the spring of 2024 with Lorne Boundy, recorded at the CropConnect Conference in Winnipeg earlier this month:
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