Fundamentally Speaking

This week USDA released its first national oats condition report for the 2025 season. Using our usual ratings system, we weight the crop based on the percent in each category and assign that category a factor: 2 for very poor; 4 for poor; 6 for fair; 8 for good; and 10 for excellent. Then we add the results.

This graph plots the first oat crop rating of each year from 1996 to 2025, along with the rating seen in the last week of July when the crop is well advanced and close to being harvested (on the left-hand axis). On the right-hand axis is the percent that the final oat yield of each season deviated from the 25-year trend.

This year's initial oat rating is 660, well below the 1996-2025 average of 717 and the second lowest initial oat-crop rating since 2011. This is down quite a bit from the year ago 712 rating as oat conditions actually improved slightly throughout the growing season last year with the end of July 2024 rating of 722 versus the 1996-2024 average of 699. Oat ratings usually decline from the beginning of May to the end of July.

Actually, the 2024 U.S. oat crop was spectacular as final yields were 76.5 bushels per acre (bpa), smashing the previous high by 6.3 bpa. That was a whopping 15.9% above the rolling 25-year average, the highest positive differential in this regard since 1992.

The bulk of oats are grown in the Upper Midwest and Northern Plains while Texas is another large oat growing state that been suffering from very dry or even drought conditions for the past three years. Texas had the lowest first crop rating this season of 498 with just 12% of its crop either in good or excellent condition with 45% poor or very poor.

There is a long way to go as the correlation between the first oat rating and the percentage that final yields deviate from trend is only 26%; but that improves to 59% when using end of July crop ratings. One of the reasons we were interested in the first oat rating of the year is what it may imply for corn when its first condition report is released next week; but the correlation here is a rather low 18%.

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