CBOT December Oats futures prices are stuck near contract highs, and US cereal companies and oat milk makers will likely have to wait another year before they see relief from high prices.
Crippling droughts in North America have cut US oat production by 40% and exports from America’s main supplier Canada are expected to be cut in half from last year, falling to their lowest levels since 2010.
The Canadian oat situation poses unique challenges for US buyers for the 2021/22 crop year. As the world’s largest oat producer and exporter, Canada’s oat production drives global trade, and this year its crop shrunk 44%, taking projected end of year stockpiles to just 268,000 tonnes, a record low. That’s down 60% in just one year.
Oat imports account for half of total US supply, and the vast majority come from Canada. The losses in production both domestically and in the main supplier of imports means the US has few options to boost domestic supplies. The US imports minuscule amounts of oats from Finland and Sweden, as seen in this Gro display.
In late March 2022, the USDA’s prospective plantings report will shed some light on whether oats, at their current record high prices, will steal acres from spring wheat and row crops. However, with the drought in Canada and the US Northern Plains hurting many small grain crops simultaneously, plantings competition in the region could be fierce. Canola, spring wheat, barley, and durum wheat are also attracting steep prices and could see increased acres next year.