Oats futures on the rise

2022 is here! Brace yourself! Whether it’s caused by the weather or supply issues, one thing to remember is that food prices are rising faster than CO2 levels. Not to be outdone by the increases we’ve seen in the poultry and beef markets, oat futures have claimed the top spot for the largest year-over-year price increases for 2021.

Commodity future prices relative YTD performance

Year to date commodity prices are up 87% for oats as of December 22, 2021, as reported by Michelle Cheng, on QZ.com. These are shocking and astronomical numbers, topping future increases of other commodities at almost 1.5 times the rate of Gasoline, and more twice the rate of Lumber and cotton.

Okay, prices are high. Everything is higher, but what gives, why are oat prices rising at such an alarming rate?

Supply chain issues that have been exacerbated by droughts in the western United States is the short answer.

A deeper dive, looking for any sign of relief, presents a bit of a bleak outlook. The droughts hit the US hard in 2020 and have not let up. 2021 saw U.S. farmers harvesting 40% less than prior year. Add to that, the global demand for oats continues to rise, largely due to increased wealth being generated by emerging economies that are changing to diets that demand more meat, and oats being largely used as livestock feed.

Keep a close eye on your oatmeals, cereals, baked goods, and of course, the animal protein markets.