Statistics Canada (STC) released their first 2016 grain and oilseed production estimates today. Total Canadian oat production was estimated at 3.020 MMT, down 11.9% from last year’s estimate of 3.427 MMT and well below the average trade guess of 3.2 MMT. Production has averaged 3.26 MMT over the past five years.
Western Canada oat production was pegged at 2.703 MMT, down 9% from 2015. Production in eastern Canada is forecast at 0.317 MMT, down 30% from last year’s exceptionally large oat crop.
While the percentage of seeded oat area harvested fell to 80% compared with the average of 83%, the lower than expected yield estimate accounted for the bulk of the decrease. STC pegged 2016 oat yield at 85.5 BPA, below most industry estimate of 87-88 BPA. Yield last year came in at 85.3 BPA and has averaged 82.6 BPA
Crop conditions throughout much of the summer were reported as well above average. Deterioration due to moisture in late July/Aug reduced the yield outlook. Again, the current STC yield estimates are still above the five-year average across Western Canada and much of Eastern Canada.
Provincially oat production is forecast to fall to 20% in Saskatchewan, 17% in Manitoba but increase a whopping 51% in Alberta. The Alberta increase is due to drought last year.
Ontario production is forecast to fall 62%, which is near the record low while the oat crop in Quebec is down 14%.
The lower production outlook, if realized, will tighten the 2016/17 Canadian oat supply/use outlook with end stocks likely to fall below 0.600 MMT. This would compare with the current estimate for 2015/16 of 0.707 MMT, and the average of 0.750 MMT.
The critical number moving forward will be on farm feeding. Mill use is forecast to climb 3.3% in 2016/17 with exports already forecast to drop 6.2% on lower horse demand in the U.S. There’s little room for further downside in production or higher exports.