Several reasons for oats revival
The recent announcement that Can-Oat Milling will build an oat processing mill in Saskatoon is further evidence the crop is making a comeback in Western Canada.
As a result of Saskatchewan Wheat Pool increasing its equity investment in Portage la Prairie-based Can-Oat by $14 million, the company will build a $17.2 million groating mill producing 72,000 tonnes of product a year.
Mike Maschek, chief financial officer of Can-Oat, said the company’s goal is to eventually buy close to 200,000 tonnes of oats in Saskatoon. It already buys about 100,000 tonnes a year at Portage.
Read Also
Prairies have variable soil moisture conditions
The dry weather in the west was welcome for preserving grain quality and advancing harvest, but it has resulted in very dry soil moisture conditions.
Randy Strychar, of Statcom Commodity Information in Vancouver, said this will push the amount of oats processed domestically to more than 400,000 tonnes.
The significance of the growth can be appreciated since at the beginning of this decade only 100,000 tonnes of oats were processed in Canada annually.
It wasn’t long ago that oats were becoming the forgotten crop. Acreage had been dropping since mechanization replaced horses. But in 1970, almost seven million acres were still being seeded to the crop in Canada. By 1991, that had plunged to two million acres. Last year, the number was up over four million again.
There are several reasons for the rebound.
U.S. production is still plunging because government programs and weather favor other crops.
Canadian prairie weather is better suited for growing oats.
Scandinavian countries, the other major oats exporters in the world, had poor crops in the last couple of years so Canada was able to move in and capture the market that U.S. domestic production could not fill.
Strychar notes that on average about 20 percent, or about 588,000 tonnes, of Canada’s crop grades milling quality.
If domestic millers take about 400,000 tonnes, that leaves less than 200,000 tonnes for export to the U.S. If production continues to fall there, American millers will have to ensure their bids are competitive enough to get Canadian oats.
That helps explain the production number, but not the fact oat processing seems to be growing faster than other grains.
One reason is that oat hulls, which have little economic value, amount to about one-third the volume of the grain. Simple economics shows the hull should be removed before transportation.
Also, oats can spoil if not pro-cessed. Heating in a kiln deactivates the enzyme that causes spoilage.
As for further processing into oat flour or flakes, that might just be an increased entrepreneurial spirit at work.
