Oat acreage forecast up

Price and disease a big factor in pushing oat acres across the Prairies

Around 2.9 million acres of oats were planted across Canada in 2015 according to Statistics Canada, and although acres have been dropping over the past few years, oat production will likely be up by more than 10 per cent this spring to around 3.3 million tonnes. Last year, the majority of those acres were planted in Saskatchewan, which grows more oats than Manitoba and Alberta combined.

“In Saskatchewan, specifically last year there was quite a bit of disease pressure from fusarium head blight in wheat,” says Shawna Mathieson, executive director of the Prairie Oat Growers Association (POGA). “Because of that some people switched some wheat acres to oats.”

Oat supplies had tightened over the past year partly due to transportation issues, and U.S. millers especially were looking for more supply in the spring, which helped stabilize prices. Although oat prices vary quite a lot from province to province, estimates for oats in Manitoba and Saskatchewan looked more profitable than canola or spring wheat last March. “Oats gained some acres when it looked like they were going to be more profitable than some other crops in the coming year,” says Mathieson. Oats also cost less to produce so there’s less risk. “You can put in oats and still make a good return on them with a lower input cost,” adds Mathieson.

About half of Canada’s oat production is exported to the U.S., and there are still issues with rail transportation. “Delivery is a major issue especially in northern Alberta and Saskatchewan. Manitoba doesn’t tend to have the same issues because they have more direct rail lines down to the U.S. and the oat growing area is closer to the U.S. so trucking is an easier option,” says Mathieson.

POGA continues to work alongside the transportation and grain industries to review the Canadian Transportation Act to help increase export opportunities.

Another factor that may have driven oat acres in some areas was late seeding, prompting growers to switch to oats because they have earlier maturity, says Ron Weik, seed portfolio manager for FP Genetics. “Oats is a tough crop. It will usually produce something even under very trying conditions,” says Weik. “If it doesn’t make maturity because of a drought or something, growers can still cut it for greenfeed, or bale it and sell it for hay.”

A good rotation crop

Oats has always been a small acreage crop and area is very price sensitive. There could be a lot more interest in oats as a rotation crop if growers could get more consistent pricing, says Mathieson. “In the spring oats was competitive with most crops, including canola, but most farmers consider canola one of their key rotation crops. It’s tough for oats to ‘buy’ acres from canola because in a typical year, oats does not compete well with canola on net margin,” she says.

The expected high yield from oats can be a double-edged sword. “One of the challenges we have in oats is that because you get higher yields the price per bushel is lower, and you also need extra storage than you would for soybean, canola or wheat,” says Mathieson. “Growers also have to factor in the cost of shipping because they ship three to four times the volume of oats per acre as they would canola. So there’s a cost for shipping and storage that has to be factored in. What I hear from growers in Saskatchewan is that they would like to see a minimum price of $3 a bushel to keep oats in their rotation and prices typically fluctuate from $2 to just over $3 per bushel.”

Millers and niche markets

Most oats produced in Western Canada ends up with millers, but marketing oats is more complex than selling other grain crops such as wheat. Millers publish lists of desirable oat varieties and specifications that growers must meet. Growers provide a sample of the approved variety they have grown for testing; if the miller accepts it they will be given a delivery schedule.

“There is a fair bit of oat milling capacity in Western Canada, especially in Manitoba and Saskatchewan and now in Alberta, which we don’t have for wheat, so the milling market is a big market,” says Weik. “One of the problems with oats is that there’s a futures market in Chicago but the market in Western Canada doesn’t always reflect that. The basis has become so wide that it’s got really no relationship to the Chicago price so it’s very much a supply and demand thing. Even in a year when we grow lots of oats, if the quality is not good for one reason or another, you can see some pretty attractive prices, provided you can meet the specifications the millers are looking for.”

There are some promising niche markets developing, such as gluten free, that are offering a premium for oats, although growers do have to adhere to stringent production specifications to ensure that there is no gluten contamination from prior crops such as wheat or barley.

Increasing the beta-glucan level in oats has been a focus for breeding programs over the past few years, as millers demand more beta-glucan content to enable them to make health claims about their products. Studies have shown that beta-glucan can help reduce cholesterol and may play a role in the prevention of cardiovascular diseases.

“For a heart-health claim to be made in the U.S. and for the Health Canada claim in Canada, there’s a minimum level of four milligrams of beta-glucan per kilogram, and a maximum level of seven per cent fat content, that millers have to meet in their products,” says Jennifer Mitchell Fetch, an oat breeder at AAFC’s Brandon Research and Development Centre at Brandon, Manitoba. “There are several things in the heart-health claim that are very beneficial for the consumer.”

“Varieties coming out of the AAFC oat breeding program tend to give you a little better beta-glucan,” says Weik.”Nobody really understands the relationship between fertility or nutrients and beta-glucan so that remains somewhat of a mystery, although some varieties inherently have higher beta-glucan.”

Another niche market is being explored by OATDEAL, a company based in Saskatoon, which has developed a gluten-free, oat-based smoothie mix and an oat-based coffee creamer. The products are available in all Co-op retail stores in Western Canada, as well as a number of smaller, specialty stores.

Oats for feed and forage

There has also been a lot of interest in oats for the forage and cattle feed markets. “We’ve had a few varieties out, the most recent one being CDC Haymaker (available through SeCan), which is a forage variety that’s intended to be cut as a forage greenfeed to meet the needs of the dairy industry,” says Dr. Aaron Beattie, a professor and oat breeder at the University of Saskatchewan’s Crop Development Centre (CDC). “We also have a feed oat variety, CDC Nasser, which is meant to be harvested for its grain but the grain has elevated fat content in comparison to milling oats to provide higher energy content for the cattle industry, and also has a low-lignin hull to make it more easily digested.”

POGA has been leading an initiative — the Horse Healthy Oats Project — to inform and influence U.S.-based horse owners of the role oats can play in their feed rations and the health benefits of feeding oats to their horses. The U.S. equine feed market offers a good premium for growers, but suffered from some bad publicity a few years ago.

“There was a big drop off in the use of oat in equine feed due to a lot of misinformation about oats,” says Beattie. “There was a perception going around at the time that oats were bad for horses, which was a misinterpretation of a study that was done in the U.S. by some veterinarians. POGA has gathered a lot of information, and are doing a lot of education, visiting feed manufacturers and horse owners to explain the actual benefits of oats.” The initiative seeks to help Canadian oat growers recapture more of this market.

POGA is also working to develop new markets for Canadian oats, such as Mexico, the third largest importer of oats globally, and several other Latin American countries. POGA is focusing on increasing consumer awareness in these countries about the health benefits of oats and the high quality of Canadian oats.

About the author

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Angela Lovell is a freelance writer based in Manitou, Manitoba. Visit her website at http://alovell.ca or follow her on Twitter @angelalovell10.

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