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Grainworld: Oats risk becoming "special" crop

Oats are in danger of becoming a "special" crop in Canada because acres are expected to decrease to record lows, the president of Ag Commodity Research said here Tuesday in a presentation at the annual Wild Oats Grainworld Conference.

Randy Strychar said he expects 2.66 million acres of oats to be seeded in Canada in 2013-14, which would be a new record low. He also expects production to come in around 2.389 million tonnes in 2013-14, the second lowest on record.

Strychar said oats area is slowly being replaced with other crops, including oilseeds, because of rising global demand for biofuel and vegetable oil and better returns.

Oats area is also slowly decreasing because of declining equine feed demand, both commercial and on-farm, said Strychar, whose Vancouver-based company is now co-ordinating the Equine Feed Oat Project for the Prairie Oat Growers Association. The project is meant to try to boost demand for oats in North American horse markets.

Feed demand is dropping, Strychar said Tuesday, because the industry is looking for higher protein and more complex pelleted feeds and is also more knowledgable about animal nutrition requirements.

There's also a lack of funding for oat research to make the industry competitive in the feed market, which is hindering the crop's ability to regain its place in the feed sector.

So, how can we prevent oats from becoming a special crop, where millers contract the oats they need and that's all that Canada grows?

Higher yields could help keep oats out of that "special" crop category, but not without increased physical demand, Strychar said.

The saving grace of the oat industry could be a free trade agreement between Canada and the European Union, if one can be signed.

Currently, high tariffs limit Canadian oats moving into Europe, but Strychar said a free trade deal could open new doors for Canadian oats and may be the industry's "lifeline."

Another positive is that the demand for oats for food use is steady to higher, with the breakfast cereal and snack bar industries doing well.

-- Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.



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