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At the grocery today I went to get some oats from the bulk bins to make muesli and I was hit with some unwelcome sticker shock. 89¢ a pound! That's up from 69¢ a pound for as long as I've been paying attention (a little over a year). For those counting on their fingers and toes, that's a 28% increase. An increase in the cost of my staples is a real punch in the gut right about now for an aspiring food wonk who needs a job (hint, hint Corby Kummer). When I got home I needed to know what my supermarket was trying to do to me.

First stop: Oat futures.
 photo oats_zps53a8f528.png

So what happened near the beginning of the year? This:

Feb 6 (Reuters) - The U.S. oat market soared to an all-time high on Thursday, ignited by a razor-thin supply of oats moving into the United States from top exporter Canada in the wake of logistical nightmares. Chicago Board of Trade oat futures rose the 20-cent daily trading limit - notching a record high of $4.63-1/4 a bushel and surpassing the previous record of $4.59-3/4 set in August 2008. That topped a month-long rally, with oats climbing 35 percent since early January.

Extreme cold and heavy snowfall this winter has caused railroads to run shorter trains and slowed movement of bulk commodities, crude oil as well as grains, out of Canada. The harsh weather, coupled with record-large Canadian wheat and canola harvests, has overwhelmed the Canadian National Railway Co and Canadian Pacific Railway Ltd, resulting in a shortage of some 40,000 grain hopper cars needed to move crops to port or U.S. customers.

. . . "In the prioritization of who gets railcars, grain isn't on the top of the list - it's not the highest revenue. And within the grain list, oats is not at the top of that list either," McCambridge said. "Supplies could be tight for some time." The United States imports more than half of the 160 million bushels of oats it uses annually to produce breakfast foods and snacks as well as feed for livestock. Oats are mostly fed to horses but they are also finding their way into pig diets this winter to help fight off the effects of a deadly pig virus, Porcine Epidemic Diarrhea virus, or PEDv, analysts said.

There's little I can do about the snow in Canada that happened back during the winter. I wonder if I can get my hog farmer friends to switch to something besides oats to fend off PEDv. Or maybe I could convince some of my Midwest corn and soy farmer friends to work some oats into their rotations. Hmmm.
€œ'The best incentive for Iowa farmers is to consider oats as a great break crop for corn/soy rotation issues,' he said in an email. 'There are benefits to a longer rotation, breaking up the disease and insect patterns developed in a two-crop rotation.'

Brunner said he'€™s seen a bump in corn yields following oats. A 10-year ISU study of oats in rotation with corn and soybeans showed that yield bump is real, Smith said. Farmers were also able to cut back on fertilizer, reduce pesticide use, herbicide use and insecticide. With the increased yields and moderate market price, the three-year rotation was more profitable than just corn-soybean, the study said.

Recently, price jumps provided another incentive for oat growers.

Ten years ago, oats were $1.50 a bushel. In February, Chicago Board of Trade oat futures hit a record high of $4.63/bu. Canada had a huge crop this year, but due to the extreme cold and additional tonnage the railroads had to move, most of the crop is still sitting in farm bins, Raser explained. Those logistic issues drove the CME oat market this winter. '€œThe market for oats was really hot, and it'€™s settled down, but you can still get oats right now about the same price as corn,' Brunner said.

Without those huge jumps in prices, though, it can be hard to make much of a profit on oats.

It gets more discouraging for my beloved oats.
Nevertheless, demand for oats has been falling for nearly a century, ever since mechanized equipment started taking over for horses on farms and roads. In fact, global acreage devoted to oats has fallen by 58 percent just in the past decade, according to General Mills. That'€™s in part because oats aren'€™t a particularly efficient or profitable crop. It takes more seed to produce an acre of oats than it does to produce an acre of other major crops, like corn. According to the USDA'€™s Economic Research Service, the average revenue per acre of corn in 2012 was $1,073. For soybeans, it was $596. For oats, it was a mere $245.
So ... maybe not. But if an oat rotation can lower pest pressures for corn and soy farmers, maybe that could convince my friends to start making their own muesli and drive up demand. Consider:
. . .  another reason for the lack of research into genetic modification: oats are pretty hearty as it is, compared to other crops. They dominate fields and keep weeds out, and they generally need less herbicides and pesticides than other similar grains.
So

There's a lot at stake here. It's not just about me and my muesli. The future of the planet may depend on everyone making there own muesli.

Consider that the relative energy efficiency of oats:

 photo Picture1_zps781afecf.png
That slide is taken from this talk by geophysicist Gidon Eshel.
http://youtu.be/...
I've queued it to where he starts and it runs around 25 minutes. The slide is sourced from Diet, Energy, and Global Warming by Eshel and Pamela Martin.

For every unit of fossil fuel energy put into growing a crop they have computed the output as a percentage. Lamb 1%, beef 14%, chicken 22%, tomatoes 60%, apples 110%, oats 500%. (At 250% and 400% corn and soy are no slouches in the energy efficiency department. They aren't staple crops for nothing.)

In addition to being a super fossil fuel efficient source of calories, oats are a nutritional workhorse.
 photo ScreenShot2014-04-06at100740PM_zps282dfff1.png

So really, thanks a lot Canada, we appreciate the oat shortage.

Sources:
Oat Futures
TradingCharts.com | 6 April 2014

U.S. oat price soars to an all-time high on Canadian rail woes
Christine Stebbins | Reuters | 6 February 2014

Oats: Once abundant, now rate
 Zoe Martin | Iowa Farmer Today | 3 April 2014

Why There Are No GMO Oats (and Probably Never Will Be)
Dan Mitchell | Modern Farmer | 10 January 2014

Diet, Energy, and Global Warming
Gidon Eshel, Pamela Martin | Earth Interactions 2006

Edible Education 101: "Food and the Environment" by Frances Moore Lappé and Gidon Eshel

Oats
Nutrition Data | Self

[cross posted at REALFOOD.ORG]

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Comment Preferences

  •  Don't blame Canada (5+ / 0-)

    Blame Harper. His Government gutted the National Wheat Board, which actually at one time, had the authority to prioritize rail shipping of grains.

  •  well, that's the market (1+ / 0-)
    Recommended by:
    marc brazeau

    I'm sure that the speculators are taking a big chunk of that. How many pounds of oats do you eat a day, anyways.?

    This Rover crossed over.. Willie Nelson, written by Dorothy Fields

    by Karl Rover on Mon Apr 07, 2014 at 10:23:15 PM PDT

  •  Canadian Oat Farmer, (0+ / 0-)

    Ron Rein weighs in:

    Hi, I’m a grain farmer from western Canada. After reading the entry “Blame Canada: High oat Prices Edition” I want to offer the perspective of a Canadian oat producer who has been effected by the scenario described in the entry.

    It’s frustrating to not be able to take advantages of higher prices in the USA, due to the inefficiencies of Canada’s transportation system. It was also frustrating to read, a few months ago, in an oat grower’s newsletter, that the America oat milling industry was to import oats from Europe, while Canadian producers were sitting on a large oat crop that they were unable to get shipped to America, due to the failings of Canada’s grain transportation system. ...

    More here.
  •  Who to blame for doubling in price of quinoa (1+ / 0-)
    Recommended by:
    Metric Only

    in less than 2 years?  (A bag of quinoa that used to be less than $10 at Costco is now $20.)  I'll have to go back to lentils and beans.
      But I'm stocked up on enough oatmeal to last at least a year.

    My Karma just ran over your Dogma

    by FoundingFatherDAR on Sat Apr 12, 2014 at 02:26:56 PM PDT

    •  Quinoa is now in fashion (0+ / 0-)

      So many rich people (and people who want to be seen as rich) are eating quinoa that there is little limit on the price.

      •  That was going to be my answer too (0+ / 0-)

        I recently attended a discussion by a dietician who works for a big name university.  She listed Quinoa as one of the super foods claiming it is the highest in protein of any of the grains as well as being a complete protein, meaning it has all of the essential amino acids.  In short, its in vogue and expensive.

        "It's not surveillance, it's data collection to keep you safe"

        by blackhand on Thu Apr 17, 2014 at 12:18:09 PM PDT

        [ Parent ]

  •  Interesting reading (0+ / 0-)

    I had heard about planting grains as a good fallow rotation options, but hadn't considered oats.  Eventually, I plan to have a fairly good size garden and I will keep them in mind as an option for rotation.  Especially considering the effect they have on reducing the need for pesticides and enhancing other resistances.

    "It's not surveillance, it's data collection to keep you safe"

    by blackhand on Thu Apr 17, 2014 at 12:20:09 PM PDT

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