Oat Prices Explained

As you can see oat prices are fluctuating. But why is that? And is there a way to predict the price of oat?

Why are oat prices fluctuating?

Generally, the price of oats moves along with other grain prices such as wheat, corn, and barley. Economic and trade factors also come into play but these are the top contributors to oat price fluctuation:

1. Weather Condition

Extreme weather conditions such as drought, floods, and severe frost are one of the major reasons for oat price movement.

Summer droughts in the US since 2020 decreased oat production by 40% according to Chad Hart, a professor of economics and crop markets specialist at Iowa State University.

Intense drought and freezing frost also knock Brazil’s grain business by 8% according to its government’s federal data.

2. Demand

The rise of various fad diets also shapes oat demand and price variation.

Oat has lots of health benefits that are necessary for a healthy diet. Additionally, doctors recommend oat as part of the meal diet which strengthens their demand in the market.

The increasing need for oat consumption certainly affects its price markup.

3. International Trade Policy

The US, the European Union, Canada, and international organizations impose product sanctions against Russia after it invades Ukraine which started in February 2022.

Russia is the largest oat producer in the world with 4,424,433 tons of oat production per year is left to find another alternative market. 

Consequently, this ban drives the oat price in the market.

Which variables impact the price of oat?

• Weather Conditions
• Demand
• Government Policies
• Competition from other Crops
• Global Trade
• Production Costs
• Currency Exchange Rates

Where does oat come from?

Commonly eaten as oatmeal, experts believed that oats came from Asia, specifically cultivated in China way back in 7,000 B.C.

Today, oats are widely grown in many countries around the world. The largest producers are Russia, Canada, Australia, Poland, and Finland. The Midwest in the United States is the top oat producer with South Dakota harvesting 10.7 million bushels in 2020.

When is the oat season?

Oat season depends on the country’s geographic location, climate, and oat variety.

There are two popular oat varieties, the cool-season oats ( the general one ) and the winter oats. Spring and summer are the best time to plant and harvest cool-season oats. Late summer and early spring are for the winter oats. This variety tends to be cultivated longer as they are overwintered in milder areas.

Typically, spring is the planting season of oat and summer is the harvesting season. Areas with milder climates can plant oats in the fall and harvest them in spring.

In the United States, the oat season is from early spring to summer. Farmers prepare their fields in late winter, grow oats in early spring, between March and April, and harvest them in late summer.

Overall, oat cultivation and production are highly reliant on the country’s location and growing conditions.