Production and Marketing of Milling Oats in Ontario


Factsheet - ISSN 1198-712X   -   Copyright Queen's Printer for Ontario
Agdex#: 113/82
Publication Date: 03/98
Order#: 98-017
Last Reviewed: 03/98
History:
Written by: J. Kyle - Soil and Crop Advisor/OMAFRA

Table of Contents

  1. Introduction
  2. Production
  3. Variety selection
  4. Seeding
  5. Fertility
  6. Disease
  7. Weed control
  8. Harvesting
  9. Combine settings
  10. Storage
  11. Price
  12. Demand
  13. Sales
  14. Conclusion

Introduction

Over the past several decades, oat production has declined significantly in Ontario. During the 1950s, Ontario oat production average 1 220 000 tonnes per year, while in the 1980s, production averaged about 280 000 tonnes. In 1989, production increased in Ontario to 339 000 tonnes, but production returned to the long-term declining trend in the 1990s.

While the majority of oats grown in Ontario are for forage or feed, many of these oats could enter the human food market. Oats for human consumption (milling oats) are high-quality oats that meet or exceed milling standards. The general requirement is for dry oats, having creamy white groats which are free from discolouration, off flavours and foreign matter such as other crops, weed seeds, insects, and rodent or insect excrement. These standards ensure that the end product will be uniform, nutritious, sanitary, and acceptable to the consumer. Oats that meet these standards may be marketed into the milling trade at a potentially higher return.

Production

The decision to grow oats for the milling market brings with it extra responsibilities in the areas of seed selection, fertilization, crop management, and harvesting. These factors may not be as critical if the oats are being grown for the feed market.

Variety selection

Millers remove the hulls and use the kernel, or groat for food production. A plump kernel with a higher ratio of groat to hull is more acceptable to oat millers. Choose varieties with high kernel weights and a low hull percentage. Varieties of hull-less oats are available but are not generally purchased for milling purposes. In some cases, eastern grown varieties of tan hulled oats are not generally acceptable to millers.

If there is any question of the suitability of a variety, contact the miller to whom you will be selling.

Diseases can reduce the size of the kernels and discolour the seed. Lodging makes harvesting difficult and makes ripening uneven by delaying maturity in lodged areas. There are differences among varieties in resistance to disease and lodging. Choose a variety with resistance to lodging, stem, leaf, and panicle diseases from among the recommended milling varieties. Sowing certified seed ensures that the crop grown will have the true characteristics of the variety stated on the tag.

Seeding

Sow as early as possible in the season. Cereals prefer cool weather with adequate moisture. These conditions promote extensive tillering and good panicle size with many large seeds at harvest. Oats are sensitive to high temperatures so late-planted oats may have smaller seeds. Early seeded oats may avoid diseases that arrive later in the season. Use treated seed to reduce the risk of seedling diseases. Normal seeding rates (75 - 90 kg/ha) and depths (2 - 3 cm) should be used.

Fertility

Soil fertility affects yield and quality of the oats. Phosphorous is required for good seedling establishment while potash is needed for anti-lodging qualities and for the grain to mature. This second factor is important for good milling quality. Fertilize to the soil test recommendations to ensure sufficient levels of phosphorous and potash. Milling oats require at least 35 kilograms per hectare of nitrogen. Insufficient nitrogen gives small kernels while excess nitrogen increases the risk of lodging and may delay harvest.

Disease

The presence of disease in a crop lowers the yield and affects the quality of the grain. Seedling diseases are normally not a problem if treated and certified seed is used. Early seeding helps the plants avoid "red leaf" (caused when aphids spread the Barley Yellow Dwarf Virus). Leaf and stem rust are caused by fungi that over-winter on buckthorn and barberry respectively and infect oat plants in early summer. Choose rust resistant varieties and eliminate barberry and buckthorn from the general area, if possible. Consult the Field Crop Recommendations manual for disease and lodging resistance ratings of varieties. Oat cyst nematodes are present in soils in parts of Ontario. Light feeding may not be noticed while severe damage will appear as dead areas in the crop. Rotation will reduce the nematode population and the damage.

Weed control

Good weed control allows the crop to produce maximum yield and is easier to harvest. Crop rotation, mechanical weed control, and herbicides should be combined to give season-long control. Quackgrass should be controlled the year prior to seeding. Weed control is most important when the oats are small as they are the least competitive at that time. Green weeds at harvest will slow or delay combining and may have to be cleaned out of the grain to prevent heating.

Harvesting

If oats are left to dry down in the field they can weather. The surface of the kernel may be attacked by a fungus and discolour or turn black. This is undesirable as dark kernels are unacceptable for milling. To get the best quality, oats should be combined as soon as they are ripe. At that stage they should be dried to lower the moisture to 14% or less, (12.5 - 13.5% is preferred).

Combine settings

Before harvesting milling oats, clean the combine to remove weed and other seeds and to reduce the risk of insects being present. Set the wind on the combine to blow the light oats out. If light oats and weed seeds are in the grain after combining, consideration should be given to cleaning the oats to increase bushel weight and decrease dockage.

Storage

At least two weeks before harvesting, all storage bins should be thoroughly cleaned with a shop vacuum and treated with an approved insecticide, if needed. The bin should have aeration to maintain grain condition. Bins should be sealed to keep out rodents, birds, and cats. Processors cannot accept oats contaminated with excrement as they are being used for the manufacture of food products, and additionally they would not meet Health Canada standards. Millers will not accept live or dead infestation from insects in the shipment.

Marketing

Only high quality oats may be sold to the milling industry to be processed further for human consumption. Before attempting to produce milling quality oats, you should know where and how to market the crop. Your main options are to sell directly to millers or to market to a grain elevator that deals in milling oats.

Price

Typically, milling quality oats attract a premium price relative to lower-quality feed oats, and at times, a premium over the price of high quality feed oats for the race horse industry. A key factor in determining the quality of oats is the test weight. Millers prefer oats that weigh 38 to 39 pounds per bushel (48.6 kg/hl to 49.9 kg/hl) or more, and may be willing to pay premiums for heavier test weights or, conversely, accept oats weighing slightly less at a price discount.

As with most grains, producers face a high degree of uncertainty regarding price. Firstly, the price of milling quality oats can fluctuate significantly between spring planting and harvest time depending on changes in supply and demand, and may be affected by U.S. market conditions. Secondly, oats that do not make the milling standard may have to be sold into the feed market.

Demand

The bulk of the oats produced in Ontario are consumed domestically, although some are exported from the province each year, mostly to the United States.

During the late 1980s, the demand for products produced from milling oats increased significantly. This increased demand was based on the view that consuming oat bran provided considerable health benefits. While we are all aware of the collapse of the "oat bran" craze based on the report of one researcher, recent approval by the US Food and Drug Administration of a health claim specific to oats and heart disease has increased consumption of oats as human food.

The processing capacity of Ontario milling oats has expanded in recent years. Historically, Quaker Oats in Peterborough has been the only miller in the province. Recently, Robin Hood Multifoods, Incorporated constructed a new mill near Port Colborne, and a new processing plant constructed by ADM at Midland has also gone into operation. With these new facilities the oat milling capacity in Ontario is estimated to be roughly 100 000 tonnes per year.

Sales

A producer wishing to market high quality oats may be able to sell directly to a mill or to a grain elevator that handles high quality oats. A mill accepting direct delivery from producers will typically post an offer price just prior to harvest time. To start the marketing process a producer must send a representative sample to the mill to determine whether the oats meet the quality standards. As well as the physical characteristics mentioned above, some millers may require specific protein levels and composition. It is difficult to get a representative sample from the top of a bin. Best samples are taken as grain is being moved or by making a composite sample as the grain is added to the bin. If your sample meets the miller's specification, a time will be arranged for delivery. The oats will be tested again upon delivery using multiple probes to obtain a representative sample, and oats not meeting the specifications will be rejected. It is very important to ensure that the original sample is representative, thus saving the cost and aggravation of transporting substandard oats to the mill.

Only certain grain elevators are prepared to handle milling quality oats as specialized equipment and careful handling are required. When selling oats to such an elevator, a grade will be assigned reflecting quality and the appropriate price premium paid. At this point the grain elevator takes possession of the oats and may sort or blend them to improve the likelihood that the product will be acceptable to the millers.

The purchasing practices of the processors will vary from mill to mill as one may prefer to purchase oats from grain elevators while another directly from farmers. The purchasing practices of an individual mill may even vary from year to year. There is also no guarantee that Ontario millers will purchase all their requirements locally as Ontario oats must compete with product from western Canada and Quebec.

Conclusion

With increased consumer demand and additional processing capacity in the province, there will be greater opportunities to market milling oats in Ontario. Through careful production, harvesting, and handling practices and good knowledge of how and where to market the crop, a producer can significantly increase their probability of successfully participating in this premium market.

The author would like to acknowledge the assistance of Stephen Clare and Duane Falk, University of Guelph, and Quaker Oats for their assistance in the preparation of this information.


For more information:
Toll Free: 1-877-424-1300
E-mail: ag.info.omafra@ontario.ca