Prices for UK milling oats in October continued to surpass already record levels, hitting the highest price since May 2013.
The average spot price last month was £181.50/t, 50% higher than the same month a year before.
Higher prices were being driven by a double whammy of falling production and rising demand for oats both domestically and internationally.
Spring planting, which accounts for between 40% and 50% of the UK’s annual crop, was hit by this year’s record dry spells that left UK oat production down 2% on the previous year, according to the latest Defra statistics.
In the meantime, demand between July and September this year was up 9% on the same period in 2017, according to AHDB cereals & oilseeds.
Oats were initially drilled too late this year, according to Brin Hughes, agronomist at Richardson Milling (UK), who added that the prolonged sunny spells had affected quality.
“Despite the acreage being slightly up this year, it will not be enough to offset the fall in yields and quality,” said Mr Hughes.
The agronomist added that the winter crop was in far better shape than that of the spring.
“It is hard to imagine prices rising far above where they are now, but this shortage of milling oats is the same right across Europe.
“The higher prices make oats a very attractive proposition for growers at the moment. If you look at them from a cost-benefit point of view, they consistently outperform feed wheat and barley,” added Mr Hughes.
The outlook is pretty good, according to Richardson Milling (UK) grain manager Shaun Jenkins.
“Demand is still there without a doubt, with contracts growing each year,” he said.
Mr Jenkins said UK exports to the mass markets of Africa, India and China are spearheading demand growth, as health-conscious middle classes in these regions are becoming increasingly turned on by UK oats.
“These overseas consumers don’t want to eat the same products they always have, and this has meant steady but increasing volumes on the export side,” he added.