(Resource News International) — Exports of Canadian oats to the U.S. are expected
to climb during the 2007-08 season on the heels of
increased output in Canada, according to industry and government
sources. A sharp drop in U.S. oats production was also seen
facilitating increased Canadian shipments.
“There will be some increased room for Canadian oats in the
U.S. market, given that Sweden and Finland are likely to have fewer
oats around to ship to the U.S.,” said Mike Jubinville, an analyst with
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A smaller oats harvest in the U.S. will also facilitate
increased Canadian oat shipments, he said.
Jubinville estimated Canada could ship 2.4 million to
2.5 million tonnes of oats to the U.S. during the 2007-08 crop year.
Agriculture and Agri-Food Canada in its September 17
supply/demand report estimated Canada’s 2007-08 oats exports at
2.3 million tonnes. This compares with Canada’s 2006-07 oats export
estimate of 2.307 million tonnes.
Sweden and Finland generally supply the US market with
300,000 to 700,000 tonnes of oats per year. However,
reduced oats production, in view of reduced government supports,
was expected to keep shipments from those countries at the bottem
end of the range, Jubinville forecast. Poor weather during the
growing season was also a factor behind lower shipments from
The lowest-size oats crop on record in the U.S. will ensure
that Canadian oats are imported, Jubinville said.
Dennis Galbraith, a merchant with CanOat Milling in Portage
la Prairie, Man., said Canada will definitely have the oats
supply to work with during 2007-08, given that production was at
least one million tonnes more than it was during 2006-07.
Galbraith felt declines in oat shipments from Finland
and Sweden reflected EU oats production in general being down as
actual demand from importing countries has decline. He noted the
actual consumption of oats in the southern U.S. racing market has
declined by at least a half.
Cost was expected to be a deciding factor in whether
Canadian oat shipments into the U.S. during 2007-08 increase
substantially or jump just slightly, said Real Tetrault, CEO of Emerson Milling.
“Corn right now is cheaper, and oats will need to adjust
accordingly to attract demand from within the U.S., particularly if
it is to be imported as a feed,” he said.
Tetrault said there will always be steady demand from U.S.
millers in Minneapolis for the good-quality Canadian oats but
there also could be a sizeable amount of lower-quality oats crop harvested in Alberta and Saskatchewan during 2007-08.
Prices for oats in the Western Canada cash market have
generally been in the $2.60-$2.90 per bushel range despite the
fact the crop is the largest it has been in 30 years, Galbraith
said.
“With such a large crop, values would probably have
collapsed by now,” Galbraith said. However, he explained,
values have held at fairly good levels in view of there being
supply/demand issues with barley and feed wheat.
He estimated there will be enough feed demand in the U.S.
and in Western Canada to help absorb some of the extra supply of
oats.
