UK set for biggest oat crop in 40 years

UK growers will face problems marketing oats after what is likely to be the biggest crop in 40 years.

About 1m tonnes of oats are predicted for this year’s harvest after farmers in the UK planted about 164,000ha of the crop, according to grain co-op Openfield.

Following 2012’s wet autumn and winter in which many farmers struggled to plant crops and stop partially established crops failing, some growers switched to oats for their fit within rotations and because there was seed available.

Some farmers had secured buy-back contracts offering premiums or set prices, but many were likely to have planted the crop on a speculative basis with no guarantee that the market would meet their price expectations, said Openfield.

DEFRA figures suggest farmers in England have planted 138,000ha, a 50% increase on last year. Openfield estimates, including Scotland, Wales and Northern Ireland, the area is likely to be in the region of 164,000ha, a 39% increase on 2012.

While domestic demand for oats had been rising steadily over the past few years due to the increasing popularity of cereal bars and specialty biscuits, it remained largely static at about 700,000t, said Openfield market analyst Cecilia Pryce.

“Demand for oats is largely inelastic as it is a poor substitute for wheat and barley, even in animal feed rations. Of course, if the price was to fall far enough this may change,” she added.

Jack Watts, analyst at HGCA, said with more than 85% of this season’s oat harvest complete, the price had already fallen below both feed wheat and barley.

“It looks as if we will have large volumes that are surplus to requirements,” said Mr Watts.

Ms Pryce said exporting the crop would be difficult as the major oat-producing nations in Europe had also had a bumper harvest and would also be looking to export their surpluses.

Using surplus oats for feed could be one option, said Mr Watts, but it is likely the UK will be forced to carry over some of the crop to next year.

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