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The growing demand for high-quality oats

A surge in China’s cereal consumption means opportunities for the crop with a new reputation as a ‘superfood’


Oats for breakfast no longer means that pot of porridge bubbling away on the back of the woodstove. Its new reputation as a health-food ingredient for other products has meant growing sales in the U.S., which now takes about 60 per cent of the Canadian crop, but export demand is set to ratchet up even more.

A report from the Prairie Oat Growers Association (POGA) says China had about 13 per cent of the world’s breakfast cereal market last year, which is valued at more than US$1.1 billion. It says Chinese have a growing interest in oatmeal’s health benefits, and that their consumption of ready-to-eat and fibre-rich oatmeal keeps growing among both young and old.

“Breakfast cereals have become trendy among young-generation Chinese, partly due to busier lifestyles and convenience,” the report says, pointing to Hong Kong, Shanghai and Beijing as trendsetting markets. Also, China’s 2017 packaged food markets for baked goods, sweet biscuits and breakfast cereals were valued at US$28 billion, $5.0 billion and $1.0 billion respectively.


Domesticallyandinternationally,theoatindustry’s new darling is oat milk, a non-dairy alternative. Made from soaked steel-cut oats or whole groats that have been blended and then strained, Canadian annual oat milk sales last year rose 250 per cent over 2018, according to a CBC story in November.

“The ‘sustainability’ aspect of oat milk production versus other dairy alternatives such as almond or soy milks gives oat milk huge potential for growth in that market,” says Scott Shiels, grain procurement manager at Grain Millers Canada Corp. in Yorkton, Sask., a major buyer of conventional and organic oats for the food market.

“We definitely have noticed an increase in demand from the companies producing oat milk in North America over the past couple of years.”

Oats’ new reputation as a “superfood” is its biggest selling point. POGA says oat milk demand is also starting to grow in Asia as another plant- based alternative to dairy milk. Oat milk is an ideal alternative for people allergic or intolerant to dairy and/or nuts. Creamier and with a sweet taste, oat milk is low in fat, high in vitamins and minerals, boosts immunity and lowers cholesterol, POGA says. “With new varieties producing higher levels of beta-glucan, the soluble dietary fibre linked to improving cholesterol levels and boosting heart health, we are seeing a surge in oat productconsumption across the board,” Shiels says.


Global oat supplies tightened in 2018-19 due to lower production in the EU, Russia, Canada and Australia. Drought continues to pressure supplies in Australia, and Agriculture and Agri-Food Canada (AAFC) recently reported 2019-20 U.S. oat production would fall five per cent from the previous year, requiring more imports.

“Global oat supplies are tight this year, following one of the lowest carryout years in recent memory,”

CDC Arborg’s milling specs are so attractive that millers have shown interest long before seed supply could reach the commercial stage.— CHRIS CHURKO, FP GENETICS

Shiels says. “Back-to-back tight carryout has pressured the market higher this year, and with pricing for next year already aggressive, I expect to see another significant rise in oat acreage in Western Canada.”

Statistics Canada reports Canadian farmers planted 3.6 million acres of oats last spring, the highest area in a decade. That was 18 per cent over 2018, and the highest percentage increase since 2002.

“Pricing relative to other grains has been strong, and producers are making good returns growing milling oats,” Shiels says.

AAFC says the 2019-20 cumulative average prices to December in Alberta, Saskatchewan and Manitoba were four to 14 per cent higher than those for the same period in 2018-19, and eight per cent higher than the average oat futures price on the Chicago Board of Trade.

“I think that the renewed interest in oats and oat production has been going on for a few years now,” Shiels says. “Other crops, such as canola and wheat that have experienced significant cost of production increases and reduced net returns are likely to lose some acres to oats in coming years.”

Paterson GlobalFoods’ plans to build a 250,000-tonne, $94 million oat mill in Manitoba and the federal government’s recent $2 million allocation to oat breeding are additional signals for the strength in the oat industry.

“New oat varieties have shown significant increases in yield and quality, providing producers with more milling oats to market. That coupled with strong milling oat demand and pricing has enabled western Canadian farmers to see great net returns on their oat acres,” Shiels says.


CDC Arborg is one of the new generation of oat varieties attracting interest from both growers and buyers. “All of our shareholders are reporting strong seed sales, with some sold out already,” says Chris Churko,CEO of FP Genetics, which distributes the variety.

Churko says CDC Arborg offers an appealing package for farmers, yielding 120 per cent of CDC Dancer. He says it matures early, offers strong disease resistance, strong straw and excellent standability.

“We’ve had some really strong yield results rightb across all three Prairie provinces,” Churko says. “CDC Arborg stands extremely well — better than short varieties that are out there.Between that, the disease package and yields, agronomically it’sa fantastic offer for farmers.”

Churko says millers are highly anticipating its release. “CDC Arborg’s milling specs are so attractive that millers have shown interest long before seed supply could reach the commercial stage. The feedback from millers has been phenomenal. It’s not often you see a variety that multiple millers express this level of interest before it’s out in the field and they’ve really had a good chance to look at it across all geographies.”

One of CDC Arborg’s features is consistently high beta-glucan levels.

“They’re a per cent higher than most of what’s out there,” Churko says. “Often you only see those really high levels in the Red River Valley of Manitoba, but we’re seeing that high beta-glucan right across the Prairies.”

CDC Arborg has also demonstrated high levels in test weights, plump, groat percentage, and protein. “It’s checking all the boxes in what you want inan oat,” Churko says.



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