Farmers might not have been feeling it much, but the world wants their oats.
And it’s going to want more and more in the future as “healthy” foods take over more of the consumer marketplace.
That’s what’s behind a new oats mill announced for Winnipeg, some oat players say.
“Putting a mill in the heart of that region is just a natural,” Lorne Boundy, an oats trader with Paterson Grain, said at the announcement of the plant Oct. 3.
Related story: Paterson plans new oat plant for Manitoba
“Oats have been moving more towards an ingredient, less a commodity. This is a perfect example of that transformation in the industry.”
In recent years, oat production has shifted west on the Prairies with the crop being pushed out of many Manitoba fields by other, more popular crops.
The U.S. horse-feed market, once a mainstay, premium-paying market for oats, has also weakened as horse-feed formulators developed blends that undercut oat pricing. Now when oat supplies run short, rather than chase oat prices higher, many buyers switch to something else.
Year after year, oat growers are told that steady demand overall from the human food market, and growing demand from “healthy” food manufacturers, should lead to better relative prices, but it doesn’t seem to last long.
All the headlines and health food talk about oats as a wonder-food haven’t produced high relative prices, and that has seen acreage slip over the long run.
Is this new plant a sign that the growing demand for the inherent qualities of oats will finally end up in tangible, farmgate demand?
Manitoba Agriculture Minister Ralph Eichler thinks so.
“This type of investment will actually do that,” said Eichler.
Whether it’s with milled oats or whole grain, the demand both south and west is strong, and likely to grow.
“When we look at the Asian market, there’s huge opportunities,” said Eichler.
Prairie Oat Growers Association president Jenneth Johanson, who farms near the announced Paterson plant, said more processing is good, but farmers have to see that show up in the price.
“There’s a lot of value in the oat and farmers need to see the demand,” said Johanson.
Andrew Paterson, whose company is putting down the money for the new plant, was ebullient when he looked to the future of oats in Western Canada.
“I feel very excited about it,” said Paterson.
Many farmers were excited by the announcement and about the positive talk, but many will be watching to see if that shows up in the price of oats.
When it comes to farmers’ acreage decisions, money talks.