We’re all well aware that the U.S. oats industry doesn’t come close to the size and complexity of its counterpart in Canada. Is that poised to change over the next 10 years? Not… even… close…
The USDA released a massive report this week on the future of U.S. grain production. The agency sets its 10-year baseline forecast for every major crop category each year. Earlier this month, they did the same with the eight major crops. So how do oats roundup in the U.S.?
Like every other report, oats go dramatically under evaluated. In fact, the word “oats” is only mentioned eight times in the entire report… and one of those times the word is part of “goats.”
But we can work with a limited data set. For 2017, the USDA pegged acreage at 2.9 million acres.
For every year from 2018 through 2026, the agency expects acreage to come in at 2.8 million.
So, acreage will fall… and remain constant in the United States.
The numbers are similar for harvested acreage. From 2017 through 2026, harvest acreage comes in at 900,000.
Below are the other key numbers that provide a glimpse of where the USDA sees the numbers…
|Yield||66.6 bpa||69.9 bpa|
|Beginning Stocks||47 mbu||24 mbu|
|Production||60 mbu||63 mbu|
|Imports||95 mbu||95 mbu|
|Supply||202 mbu||182 mbu|
|Feed/Residual||80 mbu||75 mbu|
|Exports||2 mbu||2 mbu|
|Ending Stocks||42 mbu||24 mbu|
None of these numbers are particularly eye-opening, but it signals that production will remain stagnant, and demand for animal feed will slide.
This places greater emphasis on the other factor in the space and means that we can effectively ignore a lot of noise coming from the low-volume U.S. markets.
Looking ahead, the most important factor remains political – U.S. trade with Canada and Canadian trade with China. Let’s keep our attention there and look for short-term pops when weather premiums emerge.