The Wise Oat Investor

“It’s absolutely critical that your shareholders understand the value (of investing in research and market development) and so I would advise putting more money into education”.

That view from Dr. Brian Rossnagel of the Crop Development Centre, University of Saskatchewan was just one of many presented to interim directors of the Saskatchewan Oat Development Commission (SODC), December 6th, in Yorkton. Rossnagel was one of about 16 people who met to discuss priorities for developing the oat industry in Saskatchewan. The meeting was part of the strategic planning  process undertaken by the SODC board of directors as the commission sets priorities for use of farmer funds collected under check-off provisions implemented August 1/06.

Rossnagel said experience with other commodities had shown that producer money can be used to “grease the wheels”, so to speak, in order to lever additional funding from governments, industry and other sources for research, education and market development for the oat industry. The concept is that if oat producers recognize the value of a project, and they support it with their own money, additional funding is much easier to obtain from other sources.

Well-known cereals researcher, Dr. Jim Bole, told the meeting he had seen agronomic research taking the biggest “hit’ from funding cutbacks in recent years but that he believed one of the best and fastest paybacks to industry comes form dollars invested in agronomy.

The meeting was told, however that since 1975, the number of Canadians working in oat research had been reduced from 38 to 11, in 2006.

Several directors said they were also surprised to learn that in some parts of the United States, Scandinavian oats are perceived to be of higher quality than Canadian oats, and acknowledged that future market development may have to include “branding” of Canadian oats in the market place. An example was given of how the Angus beef associations have successfully marketed their breed to restaurant and other users.

The forum was also told that up to 1991 very few Canadian oats were sold into the U.S. market place, because, said a milling industry representative, Canadian oats had the reputation for being “unmillable”, due to inconsistency in quality and cleanliness.

But that misconception was overcome when oats was removed from the Canadian Wheat Board mandate, the “Crow Rate” was removed, allowing direct shipment to mills, and the US Farm Bill provided no support for oats. Since then western Canada has become the major supplier to American oat Millers.  At the same time, oat milling and processing facilities began to spring up on the prairies.

Several from the research community said, through support from the oat development commission, the umbrella group, Prairie Oat Growers Association (POGA) could become a unifying new resource for the oat industry and a clearing house for oat information.

SODC interim board member Jack Shymko said he was all for research but cautioned that simply increasing yield does not necessarily lead to more farm-gate profitability. Shymko said he, for one, would favour a heavier weighting for market development as the SODC develops its long – term plans.

In his summation of the four hour session, facilitator Dick DeRyk of Yorkton said he seemed to be hearing several messages, including the idea that research could actually be a way to develop new markets. Several contributors said the model which had been used to expand and develop the canola industry over the past 30 years should be examined, and where appropriate used to develop the oat industry.

SODC interim chair Dwayne Anderson says the sessions were highly useful to the board of directors, who would be seeking more information from producers at sessions planned during Crop Week in Saskatoon, specifically Tuesday January 9th. Anderson said the SODC would closely heed the advice that, “We need more minds who care about oats.”