Grain Millers may soon become the largest oat miller in the world, but Terry Tyson isn’t pre-occupied with that label.
In March, the U.S. company announced a $100 million expansion to its mill in Yorkton, Sask., where it manufactures a range of conventional and organic oat products.
The investment will add 80,000 tonnes of capacity to the Yorkton plant. Industry watchers have said that when it’s operational, likely sometime in 2018, Grain Millers will be the largest oat milling company on the planet.
“We’re not all wrapped up in whether that’s the case or not,” Tyson, grain procurement director for Grain Millers, said from his office in Yorkton.
Grain Millers has headquarters near Minneapolis and operates mills in the U.S. Midwest, Oregon, Mexico and Yorkton.
Grain Millers is one of the dominant oat buyers in Western Canada, along with Richardson Milling, which has mills in Portage la Prairie, Man., Barrhead, Alta., Martensville, Sask., and South Sioux City, Nebraska,
Grain Millers expanded its Yorkton mill by about 25 percent in 2013, and the new project will double annual capacity to 160,000 from 80,000 tonnes by building a second mill.
“It’s exciting to see their expansion, right here in the heart of oat country,” said Alan Butuk, who farms near Insinger, Sask.
Tyson said the company has been mulling a major investment for several years. Owners considered the Oregon site but eventually settled on Yorkton.
“We’ve got the supply right here and we can fairly competitively access all markets in North America,” Tyson said.
“(And) the dollar (loonie) didn’t hurt, that’s for sure.”
Grains Millers is investing in oats because consumer demand is marching upward. Tyson said breakfast cereals aren’t “setting the world on fire,” but other categories such as snack bars are picking up the slack.
“Even hot cereal is strong and steady.”
The project was just announced, so it’s hard to forecast if additional oat acres will be needed to supply the new plant. It will definitely boost regional demand because Grain Millers buys most of its oats from farms that are 160 km or less from Yorkton.
“We’ll need a bigger share of what is out there,” Tyson said, adding the new plant should affect the broader oat market. “You tighten it up in one location and the ripple effect (is) everywhere.”
Looking beyond this project, Tyson said the oat industry needs to work on agronomics such as shatter resistance and lodging.
However, continuing to meet and exceed quality specifications is probably more important.
Many consumers buy oatmeal and granola because oats contain a sufficient beta glucan, a fibre that lowers cholesterol.
“We always have to be mindful that oat demand is really driven by the heart health halo.”
The Grain Millers commitment is the third global-scale investment in Western Canadian food processing recently. Roquette, a French firm, said in January that it would build a $400 million pea processing plant in Portage la Prairie.
And Canadian Protein Innovation announced in October a $100 million pea processing plant for Moose Jaw, Sask.