Paterson plans new oat plant for Manitoba

The $94-million processor will be able to mill 250,000 tonnes of raw oats per year, aimed at the U.S. consumer market

With almost a third of the crop sitting in the field under a cold October rain, it wasn’t the best day to be farming in eastern Manitoba.

But Jenneth Johanson was feeling happy about the future, whatever happens this harvest. Her area just became a better place to grow and market oats.

“It’s going to mean a lot for all the growers of Western Canada, not just Manitoba,” she said about the just-announced plans of Paterson GlobalFoods to build a $94-million oat processing plant on the western edge of Winnipeg.

Manitoba Premier Brian Pallister said he saw this plant as another sign that his government’s pro-investment and pro-agriculture focus is paying off.

“We are adding value right here in Manitoba,” said Pallister.

Related story: VIDEO: New mill may bode well for future of oats on the Prairies

“This momentum is a big deal.”

The Paterson plant, to be called O Foods Ltd., will be able to mill 250,000 tonnes of raw oats per year, aimed at the well-paying United States consumer market.

Oats have long had a valued reputation as a health food and is included in many “healthy” consumer products. The idea of an oats mill for Western Canada is hardly new, with large, existing facilities already located across the Prairies.

But this latest venture, in the core of the old Red River Valley oat-growing region, got farmers chattering.

The crop’s acreage has suffered in recent years as better-returning crop options, especially soybeans and canola, have taken over more of farmers’ rotations.

Much investment has been pouring into southern Manitoba to capitalize on the plant protein phenomenon, a development that has further distracted attention from oats.

This plant adds breadth to a surge of value-added investments in the area, with the Simplot potato plant in Portage la Prairie doubling its capacity, Roquette building a $400 million plant protein facility in the same city and Merit Functional Foods announcing plans to build a $65 million plant near Winnipeg.

Pallister said about 70 percent of the value-added processing brought to Manitoba in the past four years has been in the agriculture sector.

Andrew Paterson, his namesake company’s president, said PGF was considering a site in North Dakota, but was convinced by the provincial government’s economic development head to think about Manitoba instead.

With the help of “tax incremental” support, which is offered to all significant developments in Manitoba, Paterson decided to build the mill at home.

“It’s probably the single biggest reason this plant is in Manitoba and not in the United States,” said Paterson.

It’s hardly charity by Paterson. Local farmers produce the best oats his company can find today.

“Right here in this region, we grow the highest quality oats,” said Paterson.

“It’s got the highest beta glucan on earth.”

That’s music to the ears of Johanson, who wants oats to seem like a preferred option in growers’ minds when acreage decisions are made.

“This sort of investment will help,” she said.

“Having another local buyer, especially one that’s adding value to the crop right here, is a vote of confidence in the crop.”

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