Oat milk takes off as soybean products face allergy concerns and almond production is accused of excessive water use
Oats are entering a world of milk and honey, with consumer demand surging and prospects growing.
“It’s a booming market,” said Randy Strychar, North America’s leading oats market analyst, when talking with growers at the CropConnect conference held Feb. 15-16 in Winnipeg.
“In my 40 years in the oat market, I’ve never seen these kinds of consumption growth numbers. It’s outstanding.”
That growth has much to do with the surge in oat milk, a beverage based on a pure oat concentrate. Oat milk has gobbled up large shares of non-dairy milk demand from soy and other plant-based beverages.
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Soy milk’s reputation has suffered from the sensitivity of some consumers to soy components, which can cause allergy and digestive issues. Almond milk, another growing non-dairy milk alternative, has to fight allegations that it hurts the environment because of excessive water consumption by almond production.
Farmers might think the oat milk surge won’t mean much for them because a bushel of oats can make a lot of oat milk concentrate, but Strychar said millers tell him differently.
“It’s been a game changer,” said Strychar, who works directly with millers and oat milk producers.
“It’s added a whole new element to the oat market.”
To make the beverage, oats are turned into large flakes by the miller, then the flaked oats are turned into a concentrate by milk producers. About 10 percent of the final product is oat concentrate, with the rest being mostly water and a few other ingredients to create the milky experience.
The exact amount of oats being consumed by beverage production is hard to say, Strychar said. Producers don’t reveal their secret recipes. About two-thirds of an oat ends up in flakes, and those flakes produce the concentrate that makes up about 10 percent of a milk carton, but the numbers get fuzzy inside the proprietary processing business.
Regardless, with oat milk consumption booming, the oat industry is likely to see continued growth in milling, with all the growth expected to be in Canada.
“You build the mills where the oats are,” said Strychar, noting oats’ high volume and low transportation efficiency. About one-third of an oat ends up as hulls and other non-flake matter, so it makes little sense to ship it far in grain form.
American mills might expand, but new mills in the United States are unlikely. Strychar estimated one new 50,000-tonne-per-year mill needs to be built every five years to keep up with demand.
That demand could see a further surge if the Chinese market is opened. Non-tariff barriers currently keep Canadian oats out of China, but if they were removed the world’s third-largest oat import market, following on the U.S. and Germany, would be open to Canadian oats.
“Getting access could mean a half-a-million-tonne market for us,” said Strychar.
