Marketing record oat crop could be problematic

Tough competition from European exporters continues to pose a marketing challenge for the UK’s oat crop.

Although oat use has been steadily rising in the past 20 years, this is the largest crop for 40 years.

Oats were the choice made by many after winter crops failed or could not be drilled in late 2012, leading to a 55% rise in the size of the crop to an estimated 957,000t.

The average ex-farm price for milling oats in the week to 14 November was £119.40/t, with feed oats at £105.20/t, compared with more than £200/t a year earlier. This reflected the higher volume of oats grown without a contract, said HGCA.

Ex-farm oat prices were at a discount of £52.3/t to feed wheat and £28/t to feed barley, compared with premiums of more than £30/t and £47/t respectively a year earlier.

“While the current price differentials suggest oats are trying to compete, incorporating three cereals in rations presents logistical challenges, which may limit the volumes used,” it added.

The export market is expected to be difficult due to increased production in Finland and Sweden, but the UK exported 7,000t of oats between July and September, a considerable increase on the past two seasons.

For animal feed demand, oats needed to compete with the largest barley crop since 1997 and the expected high volumes of imported maize, said HGCA. The first quarter’s usage data for millers shows a 6% increase on 2012-13

Camgrain oat and barley trader Gordon Gowlett said millers would be looking very carefully at varieties in sourcing oats.

“This year there has been a wide range in varieties. We imported a lot of seed, including some varieties not best suited to our climate.”

Millers were used to good winter varieties, he said, and there was still demand for quality milling oats.

More on this topic

Market Prices & Trends