A pail of oats is the best way to catch a horse, but capturing new markets takes a bucket of money.
That’s why the announcement by federal Agriculture Minister Gerry Ritz of $3.7 million aimed at helping the industry boost exports has the Prairie Oat Growers Association (POGA) feeling frisky as a new foal.
The funds include an investment of up to $600,000 from AAFC’s AgriMarketing Program to help oat producers gain a foothold in the American equine market, estimated at nine million head.
A further $109,500 will be used to evaluate how oat beta-glucan fibre improves the immune system in horses.
Ritz said that while oats is now used for a wide variety of products including cosmetics, tapping the horse market down south is the quickest route to boosting exports.
“The health benefits of oats to humans are well known, but this new research will unlock the health benefits to horses,” said Ritz, who made an appearance at the Manitoba Oat Growers Association’s annual general meeting held on the sidelines of Ag Days.
But Bill Wilton, outgoing president of POGA, said it’s more a case of rounding up a market that has busted loose in recent years. From over one million tonnes 12 years ago, oat exports to the horse market down south have plunged to just 250,000 tonnes this year.
“One of the difficulties is that we don’t have an advocate or a salesman that goes down and promotes our oats,” said Wilton.
Feed manufacturers switching to pelletized feed is the main reason why sales have foundered, he added. The pellets nowadays don’t contain as much oats as they used to because pellet markers have been substituting oats with wheat byproducts, beet pulp, DDGs, or other cheaper alternatives.
“As long as they meet the nutritional requirements, they don’t have to list what’s in it on the bag,” said Wilton.
But judging by focus group studies, horse owners aren’t thrilled with the substitutes, and many would actually prefer a ration containing more oats because they regard the grain as a “safe, natural and healthy” feed.
“We think there’s a real opportunity to get that market back,” said Wilton.
The funding will support marketing activities that include a multimedia advertising campaign to increase awareness of Canadian oats as healthy equine feed, and attendance at trade shows and conferences where POGA can hold face-to-face meetings with equine experts, such as veterinarians and nutritional researchers.
Also, up to $2.9 million of the new funding will go to new oat variety research aimed at increasing yields and disease resistance, and $151,500 has been earmarked for creating a new method of identifying gene markers that can be used by breeders to pinpoint desirable traits.
Jennifer Mitchell Fetch, the only federally funded oat breeder in Western Canada, will begin researching new oat varieties at the Brandon Research Centre starting this spring.
Shawn Mathieson, executive director of POGA, said that the industry has managed to lever $1.6 million in oat checkoff funds into $8.4 million worth of research and market development in recent years.
To support further investments, the members present voted unanimously to remove the $250 checkoff overcap limit.
The voluntary, refundable checkoff of 50 cents per tonne had been capped to protect sellers of large volumes of the grain. Removing it puts the organization in line with virtually all other major commodity groups and oat grower associations in Alberta and Saskatchewan, she said.
David Drozd, of Ag-Chieve Grain Marketing Advisory Services, said that oats at $4 per bushel in the March 2014 futures contract won’t last because oats is likely to “catch up” with the plunging price of corn.
“The outlook isn’t that good from now until Christmas. Yesterday was a good day to sell grain, today is the next best, and it won’t be as good tomorrow,” said Drozd, who said that he believes prices would fall to $2.80 if it wasn’t for the difficulty shipping the crop to market.
Clogged logistics for the light and bulky crop are the reason that local elevators, especially farther west, are offering as little as $2 per bushel, he added. Moving oats to the markets in the United States is problematic due to trucking restrictions south of the border that don’t allow Super B transports.
Canada is a major oat producer, and the largest exporter of oats in the world. In 2012, the Canadian oat industry brought $430 million to the farm gate and exported $620 million worth of high-quality oats to a number of key markets, including the U.S.