The USDA in their latest crop estimate pegged US harvest oat area at 722 ThAc, which if realized, would be a new record low. Based on a 4.8% YOY decline in yield (3.7% below average) and the current harvested area forecast, 2021 oat production would fall to 44,764 ThBu (650 ThMt), a new record low (see attached).
The US harvested area estimates are down 4.1% this month and 4.1% below the five-year average said the USDA. Surprisingly, South Dakota harvested area climbed this month despite very dry conditions. Iowa is up 5.1%. Area is down 8.2% MOM in North Dakota, 9.9% in Minnesota, and 27.2% in Wisconsin.
The bad news is the continued dry/drought conditions could see final harvested area, yield and production fall from current estimates in many Midwestern/Western states.
Production is on track to fall 10.4% in major Midwestern states (see attached), climb slightly in Eastern States while down 18.7% in South Central states and 12.7% in Western States.
Our US oat balance sheet points towards record low end stocks in 2021/22 of 465 ThMt (see pg. 4). The USDA in their forecast is currently holding US oat yield near the five-year average while we are down 3.7% due dry/drought conditions across much of the major Midwestern states. This region accounts for 64% of US oat production. Look for the USDA to lower yield estimates in the next report.
US oat imports are expected to climb 6.7% in 2021/22 while mill use is on track to increase 2.3% as demand for oat food products continues to climb. Though some of the COVID gains will be reduced as consumers shift eating habits.