A market analyst is forecasting a five to ten percent increase in oat area, which comes on the heels of a 15 percent increase in oat production last year.

“We have way too many oat supplies and too much production in Western Canada to keep these oat prices from sustaining what we saw in 2018 and 2019,” said Randy Strychar, president of Ag Commodity Research and Oatinformation.com. “We are likely to see the price continue to slide lower, particularly if the oat acreage in 2020 is what I think it is and that is five to ten percent higher.”

Oat yields were above average last year and generated good returns.

As for export markets, Strychar says oat sales to China have not advanced as much as expected.

“I think the Chinese millers probably got ahead of themselves in purchasing raw oats, but the food numbers showed growth of probably 25 to 30 percent on breakfast cereals and snack bars in the Chinese market. Our problem is we can’t get in there without a protocol and that is really up to the Chinese government,” Strychar said.

Oat sales to Mexico have improved due to drought in Australia and a marketing effort by the Prairie Oat Growers Association.

The Chicago Board of Trade continues to carry an oat futures contract, something Strychar believes is outdated because it treats oats as a feed grain.

“The mentality of the traders, and I go back to my trading years, we still look at it as a feed grain and are trading it the same way as 1979.” he said. “It is not a feed grain. Oats are a special crop and demands a premium.”

Oat millers have a number of specifications such as growing the crop without glyphosate.

(Above photo: Randy Strychar–courtesy of CropSphere)