A drought struck North America’s oat fields this season, and farmers are harvesting such a small crop that prices have risen to record highs, signaling inflation for breakfast staples like oatmeal and trendy alternative milk.
Severe hot and dry weather probably slashed oat production by nearly half to an 11-year low in Canada, the world’s biggest exporter. Similarly in the U.S., one of the world’s top consumers of the grain, the harvest will be the smallest ever. The result is all-time high costs that will likely filter down to consumers.
The situation for North American farmers was so dire in the summer that many cut their losses and harvested damaged plants to be sold as feed for animals. That means even less will be available for making popular foods like granola bars and Cheerios, the No. 1 cold cereal in the U.S.
“You can’t make a Cheerio out of barley,” said Randy Strychar, president of Ag Commodity Research and Oatinformation.com.
While major food companies haven’t announced price increases related to oat products yet, the higher costs for the grain can only add to the food inflation that’s been rampant this year. Global food prices recently touched a decade high, according to a United Nations index, while oat futures on Friday climbed as much as 2.1% to reach an all-time high of $6.36 a bushel.
The oat has a humble history as a staid breakfast choice in the form of oatmeal or cereal. But more recently it’s become a trendy darling of millennials. Food companies targeting younger, affluent consumers are billing it as an accessible superfood. Environmentalists tout it as a key crop for reducing carbon emissions in agriculture…
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