Oats may rebound
FARGO — Michael McMullen, veteran oats breeder at North Dakota State University, has this answer when asked about working with a crop that doesn’t get much attention.
“I like to work for the underdog,” he said with a smile. He added more seriously, “And I like the nutritional benefits of oats.”
Oats were once one of the Upper Midwest’s most popular crops. They’ve been overshadowed for years, however, by more profitable crops, particularly corn and soybeans.
Oats fare best in a cool climate, and North Dakota, Minnesota and South Dakota remain among the nation’s top oats producers. But planted oats acres in the three states have plunged more than 90 percent since 1968 and roughly 50 percent since 2003.
Nobody, not even oats’ biggest boosters, think the crop will stage a big comeback anytime soon. Competing crops are popular and well established, and oats’ price remains relatively unattractive.
What’s more, as oats become less common, many elevators in the region have quit handling the crop.
But supporters of oats said there are reasons to think their crop’s long decline may slow or even stop.
Longstanding public awareness of oats’ nutritional value is translating into greater sales, boosters said.
Grain Millers Inc. manufactures whole grain products from oats and other crops.
Oats, a whole grain, provides a number of health benefits, according to the federal government’s 2010 Dietary Guidelines for Americans.
Greater emphasis on soil health and soil sustainability also could help oats. Growing oats in rotation with other crops can enhance soil fertility and hold down crop disease, experts say.
Neil Saunders, a Leonard farmer, has been raising oats since the late 1990s.
“I like having a rotation that’s better for the soil than just corn and (soy)beans all the time,” he said. “I think it’s healthier to have a fuller spectrum.”
Roskens said grain millers “are really banging the drum” on the connection between soil health and oats.
The overall downturn in crop prices this year also could cause some farmers to take a fresh look at so-called minor crops such as oats.
The North Dakota State University Extension Service’s 2014 Projected Crop Budgets, for instance, recommends that farmers search for profit opportunities in crops they generally don’t grow.
The NDSU crop budget projections illustrate why oats have lost favor with most area farmers.
In southeast North Dakota, for instance, oats are projected to lose $57.40 per acre. In contrast, corn is expected to lose $12.25 per acre, with spring wheat earning an estimated $7.69 per acre and soybeans an estimated $62.81 per acre.
Oats also are estimated to be less profitable in other parts of the state.
Even so, oats are projected to be more competitive this year than they had been.
Last year, oats were projected to lose $37.13 per acre in southeast North Dakota. In contrast, corn was expected to earn $176.20 per acre, with spring wheat earning an estimated $85.86 per acre and soybeans an estimated $121.98 per acre.
In short, oats again come up short financially to other crops — but the difference isn’t as big as it had been.
Raising and selling oats for seed, rather than selling it at an elevator, can be profitable, says Mike Gartner, with Gartner Seed Farms in Mandan.
Oats sold for seed typically fetch a premium to oats sold for the cash market, says Gartner, who works with oats growers across the Upper Midwest.
Another thing to consider about selling oats:
There’s still a relatively active futures market for oats on the Chicago Board of Trade, allowing farmers to hedge their oat crop, Roskens said.
When and if oats go off the CBT, oats could become like barley, which increasingly is raised under contract, he said.
Big acreage shifts
Oats used to be a big deal in the Upper Midwest. The region’s cool climate contributed to that, as did the use of oats to feed farmers’ workhorses. The arrival of tractors, however, limited on-farm need for oats.
In 1945, when many farmers still used horses, U.S. farmers produced 1.5 billion bushels of oats. They produced only 65 million bushels last year, according to U.S. Department of Agriculture figures.
Oat production also has suffered because corn and soybeans have spread north and west, experts say.
A few statistics illustrate oats’ decline:
V U.S. farmers planted 3 million acres of oats in 2013, down from 23.3 million in 1968. Just one acre of oats was planted last year for every eight acres planted 35 years ago.
V The acre losses are even steeper in North Dakota, South Dakota and Minnesota.
In North Dakota, farmers planted 225,000 acres of oats in 2013, down from 2.4 million acres in 1968. Just one acre of the crop was planted in the state for every 11 acres planted 35 years ago.
V Oats also are hurt by their declining use in livestock feed formulations. The greater supply of distillers dried grains, a co-product of ethanol production, has worked against oats.
Oats accounts for just 0.4 percent of U.S. feed grain production in 2013 and 2014, with corn contributing 95.3 percent, sorghum 2.8 percent and barley 1.5 percent, according to USDA’s Economic Research Service.
Regaining a greater role in feed formulations would help U.S. oats production, Roskens said.
Other state programs
A number of state oats breeding programs, including the one in Minnesota, have been phased out in recent years. Only a handful of states, including North Dakota, South Dakota and Wisconsin, still have such programs.
Lon Hall, South Dakota’s long-term oat breeder is retiring, but the state plans to hire a replacement, says Nathan Mueller, South Dakota State University Extension agronomist, whose crops include oats.
SDSU in 2012 released the Horsepower and Goliath oats varieties.
Horsepower offers excellent yield potential. Goliath is a multi-use purpose that can be used grain production, forage or straw, according to information from SDSU.
Mueller says he optimistic that oats will continue to draw interest from South Dakota farmers.
McMullen and others say there’s excellent cooperation among remaining oats breeders and others in the small, close-knit oats industry.
“We know each other, and we work well together,” he said.
Make money from oats
Modern oat varieties generally offer excellent potential yields, experts said.
Yields in experimental plots have exceeded 200 bushels per acre, McMullen said.
But he and others say area farmers sometimes give less care and attention to oats than other crops they raise.
Part of the reason is that some farmers plant oats as a so-called “combination crop.” They’ll use some for hay and harvest the rest for grain. Because some goes for hay, producers are reluctant to invest heavily in inputs that would boost grain production.
Experts who talked with Agweek recommend the following to farmers interested in oats:
V Determine what your oats would be used for. Would they go for seed? For sale at your local elevator? Hay? Forage?
V Make sure to have a market lined up before you plant.
V Use a seed variety designed for the use you have in mind.
V Treat oats the same as your other crops.
“Oats for 100 years has been treated as the low man on the totem pole. It doesn’t get managed all that closely,” Smith said.
“What I challenge guys to do is, plant it early, manage it well, spray it with fungicides. If you do, you’ll find it can be a profitable crop.”