Creating a market for a “good idea” is more likely to miss than hit, but Scott Sigvaldason is working hard to sell AC Gehl hulless oats as a rice alternative

Scott Sigvaldason knew Gehl was something special right away. She was unlike any other he had seen come through his feed processing plant near Netley, Man. She was truly hulless and completely hairless. He likes that kind of thing — especially in an oat. “This isn’t pigfeed,” he said at first sight.

Instant love can make you crazy. It can make you abandon the quiet safety of your old comfortable farm. It can take you places you never thought you’d go. It can make life fun again. That’s the way it has been for Sigvaldason and Gehl, a hulless oat variety bred by Vern Burrows at Agriculture and Agri-Food Canada’s centre in Ottawa. In the past year or so, Sigvaldason has taken his hulless oat food product — Cavena Nuda or “Rice of the Prairies” — to 42 hotels and restaurants in Winnipeg, as well as a few Manitoba food retailers. The Toronto Maple Leafs’ team nutritionist has bought some for team meals. And October 14, Sigvaldason will be on CBC’s Dragon’s Den pitching “Rice of the Prairies” to the show’s panel of venture capitalists. Did they buy in? We have to watch to find out.

Sigvaldason’s farm, Wedge Farms, near Arborg, Man., has been in his family since 1903. The past decade or so has been a struggle, with so many wet years on the cropping side and a “horrible” experience in hogs. He had built a bunch of pig barns from 1999 to 2001. He started with finishing, but couldn’t get enough weanlings to keep the barns full. So he got into farrowing. Then things started to fall apart. He first sold off the finishing barns and kept his 280-sow farrowing operation. Then it collapsed when all the people buying his weanlings went bust. “Hogs are a horrible business,” he says.

In the meantime, he had bought the old elevator at Netley and converted it into a feed mill. He started processing hulless oats for pig rations in 2006. “Hulless oats can bring baby pigs back from the dead,” he says. When looking for a new variety to replace AC Belmont, he discovered the special properties of Gehl. In the time since then, Sigvaldason has leased out the farm so he can concentrate his efforts on the feed mill and on building a food market for Gehl.

“I worked on the farm for 20 years living like a pauper,” he says. “I’m putting that same energy into this project and having a lot more fun. This is incredibly difficult work, but I can at least see light at the end of the tunnel.”

WHY RICE OF THE PRAIRIES?

Sigvaldason came up with “Rice of the Prairies” as a marketing angle in the middle of a typical long day at the feed mill. The other name he uses on the packaging is Cavena Nuda. “Cavena” is short for Canadian avena (the Latin name for oats) and “Nuda” for naked — signifying the hulless trait. He and three partners set up Wedge Farms Nutrition Ltd., to run the food oats business.

Sigvaldason chose to market a rice alternative because he knew he couldn’t compete with Quaker in the rolled oats market. “They’d crush us like a bug,” he says. Of course the rice market isn’t small, either, but hulless oats has many nutritional advantages over rice and “oats as rice” is a new concept. “There is nothing on earth like this,” he says.

Vern Burrows likes the idea. “Rice of the Prairies has huge market potential,” he says. Canada imports $300 million worth of rice every year, and we don’t produce any of it. “By getting people to replace some of their rice with oats, we can move some of the production to Canada, and also move oat consumption from breakfast only into lunch and supper,” he says.

The 79-year-old oat breeder has registered 30 oat varieties in his

—DAVE SHOTT

“Gehl seems to weather the elements

quite well. Last year, I actually got a saleable crop of Gehl whereas my regular oats all graded sample.”

career. Gehl is his latest, and in talking with Burrows you can tell he feels a special bond with this one. Gehl IS special. Yes, it’s hulless — but he’s developed many other hulless varieties. Gehl is also hairless, which stands her above the pack. “The problem with older hulless varieties is that the seed is covered with trichomes — tiny hairs — that blow off while combining and processing,” Burrow says. “They drive people nuts with itch.”

Trichomes also have an electrostatic charge — like most hair, I suppose — that can attract fungal spores and increase the chance of infection on the seed. “Gehl is essentially bald and was bred specifically for that trait,” Burrows says.

Hulless oats make excellent feed for pigs and poultry — and people, he says. It has metabolizable energy similar to corn and protein close to soy. Besides a pleasant taste and texture, Rice of the Prairies has 12 grams of dietary fibre and 4.4 grams of soluble fibre per 100 grams. White rice has 1.3 grams of dietary fibre and zero soluble fibre in the same volume. These numbers are from nutritional analysis done at the Food Development Centre in Portage la Prairie, Man.

Rice of the Prairies has 17.2 grams of protein per 100 grams, compared to 7.1 grams for white rice, and 5.7 milligrams of iron per 100 grams, compared to 0.8 mg for white rice. A quarter-cup serving of Rice of the Prairies provides 20 per cent of your daily recommended iron intake. Granted, it also has way more total fat than white rice: 8.8 grams per 100 grams compared to 0.66 for white rice.

On the processing and handling side, the hulless feature offers a logistical advantage over regular oats. “Quaker Oats’ plant in Cedar Rapids, Iowa, produces 14 carloads of hulls per day when running at peak,” Burrows says. “They’re putting hulls into landfill because they don’t have a market for it all.” Some is sold as filler for feed, but oat hulls are best left in the field, he says.

The big oat millers are set up to handle oats with the hull attached, but Burrows estimates they could save $10 million per year if they switched to hulless. All oats grown in China are hulless, he says, and “in time there won’t be any covered oats grown in Canada.”

GROWING GEHL

Dave Shott thinks Burrows might be right, but he doesn’t expect the transition from hull-on to hulless to be quick. “I don’t know if I’ll see it in my lifetime,” he says.

Shott farms at Arborg and he’s a behind-the-scenes co-owner of Wedge Farms Nutrition Ltd. The others are brothers Harold and Uli Gerher of Niverville, Man. Shott has been growing hulless oats for a few years, selling them to Sigvaldason’s feed mill at Netley. He put up capital to take Gehl into the human food market. Being a hulless oat grower and having the processing plant close by, it was in

Wedge Farms Nutrition sells its Rice of the Prairies — made from hulless oats — at various retail outlets in Manitoba and to 42 hotels and restaurants in Winnipeg. Scott Sigvaldason, co-owner and general manager of the company, will be on Dragon’s Den on CBC TV October 14 to pitch his idea to the country.

his “best interests” to expand the business, Shott says.

Growing hulless oats is not much different from growing regular oats, he says. It looks like a regular field of oats, but with bushel weights around 60 pounds and a seeding rate of 90 pounds per acre.

You will want to watch for leaf diseases and apply fungicides if necessary. Standability is good and it doesn’t lodge as easily as regular oats, so Shott puts on more nitrogen. Shott gives his wheat 60 to 80 pounds of nitrogen per acre and gives Gehl 60 to 70 pounds.

You’ll notice a little longer maturity compared to other oats, but he wouldn’t use any preharvest dessicant with Gehl because it is for the food market.

Shott hadn’t harvested his 400 acres of Gehl when we talked in September, but he says it looks really good. Manitoba’s Interlake region had another extraordinarily wet summer, the fourth in the past six years, with many acres unseeded throughout the region. “Gehl seems to weather the elements quite well,” he says. “Last year, I actually got a saleable crop of Gehl whereas my regular oats all graded sample.”

The first fields coming off in Western Manitoba this year are in the range of 50 to 60 bushels per acre. Yields in the Red River Valley in past years have been around 60 bushels, Sigvaldason says, but he has nothing to report yet from that region in 2009.

Lots of farmers have expressed interest in growing Gehl for Wedge Farms Nutrition. “We’ve turned down more than we’ve approved,” Sigvaldason says. Right now, they have a dozen or so growers spread around the province.

Farmers pay $15 per acre for the contract, which includes seed. Growers agree to deliver everything they produce back to Wedge Farms Nutrition. In return, they get a premium of $65 per tonne over the price of regular oats.

Is the premium enough? “I’m not sure, yet,” says Shott.

Wedge Farms Nutrition is still

finding its way in terms of market potential and price point. “Hulless oats is a product without an established market. I have to develop a market,” Sigvaldason says. The premium is based on what they can get for Gehl in the feed market, which keeps the business protected until they find a steady market at a sensible price on the food side. The company processed five million pounds of Gehl from the 2008 crop and Sigvaldason has a target of 12 million for the 2009 crop. If a lot of it has to go into feed, Wedge can still buy all that it contracted and have a home for it, he says.

THE FOOD MARKET

If you look at a package of “Rice of the Prairies,” it doesn’t look like much has been done to the oats. They look like super-clean groats. Steps are taken to make them look and cook better, but “if I told you what they were, I’d have to kill you,” Sigvaldason says.

Interlake Agri in Fisher Branch, Man., does the processing. Sigvaldason put the machinery in place, but relies on Interlake Agri to do the job right. “They have the staff, expertise and time. I looked around for someone with the extra capacity and the right people to do the job. These guys had the quality protocols in place. They already shipped to Europe and take meticulous care.”

Fusion Grill restaurant in Winnipeg makes a point of using local ingredients where it can. It uses Rice of the Prairies in a tomato salad. It coats goat cheese balls in hulless oats and tosses them with the salad.

“You can use it as a rice substitute no problem,” says Fusion Grill owner Scot McTaggart. “You can use it in any recipe that calls for rice. Our chef has tried it in soups, risottos and rice pilaf.”

Rice of the Prairies takes 25 minutes or more to boil, so it’s more like brown rice than white rice when it comes to cooking time. It may not be convenience food, but in the days of slow food and nutritious ingredients, Rice of the Prairies will appeal to some consumers.

STILL HARD TO MAKE MONEY

Despite all his efforts and his successes, Sigvaldason says he’s still not making a profit on the venture. But that takes time and doors are opening for him. He will be at food shows in Boston, Chicago, Frankfurt, Germany and the Netherlands this fall. He’s also knocking on more doors in the sporting field.

When asked to look back on his life in farming and the food business, Sigvaldason says, “If I had known at 22 what I know now, I would have applied at Manitoba Highways.” But what would have been the fun in that?

Jay Whetter is the editor of Grainews

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