Spurred by the ‘oat mafia,’ the familiar grain makes a comeback in Minnesota | Business News

ZUMBRO RIVER VALLEY, Minnesota — From his combine on an October afternoon, harvesting dried-out soybeans the color of dust, Martin Larsen points to a hillside where his ancestors from Scandinavia homesteaded.

History might be happening again on the Larsen farm.

Last year, on this plot of land along the Zumbro River, the 43-year-old farmer from Byron grew oats. Not oats for hogs or cows. But oats for humans. He hauled the oats to a miller across the state line into Iowa. A previous year, Larsen even had a contract with Oatly, the trendy Swedish maker of milk alternatives.

Something of an oat renaissance has been occurring down in the fields west of the Mississippi River. During winters, Larsen — through his job with the Olmsted County Soil and Water Conservation District— evangelized to fellow farmers on the humble small grain.

His friends and neighbors were listening. As of this fall, over 60 farmers, covering 6,000 acres across southern Minnesota, have joined Larsen’s informal coalition to grow food-grade oats. They call themselves the “oat mafia.”

Star of breakfast food, children’s books and, increasingly, those nondairy lattes, oats are easier on the environment, requiring less nitrogen than corn, which means a lot in the karst-rich hill country of southeastern Minnesota, where the U.S. Environmental Protection Agency has tasked state officials with cleaning up drinking water.

“Nitrates come from this,” said Larsen, driving his gray Gleaner combine on a patch of soybeans beneath a hillock just beyond the suburban sprawl of northwest Rochester on a recent warm Friday afternoon.“I’m not going to beat around the bush anymore. That’s what the data says.”

But as the oat mafia looks to the future, they’re struggling with a basic marketing question: Who will actually buy these oats they’re growing?

Shea-Lynn Ramthun walks through a field of volunteer oats at her farm in Cannon Falls. Volunteer oats are oats that re-seeded themselves due to a combine harvester issue. The soil will benefit less due to the re-growth but it is still healthy for the next year’s corn crops. (Alex Kormann/The Minnesota Star Tribune)

Once the land of oats

Minnesota was once a golden land of oat farmers. Rotated with corn and soybean on small diversified farms stretching from Wisconsin to the Dakotas, oats were traded as early as 1877 on the Chicago Board of Trade. By 1950, farmers planted 5 million acres of oats across Minnesota.

“We have a long history of oats in the state,” said Jochum Wiersma, a Crookston-based small grains specialist with the University of Minnesota Extension.“A lot of that never made it to be a Cheerio.”

Oats, often enough, were fed to horses. But as mechanization replaced horses, oat numbers fell. Furthermore, say industry experts, the farm bill — the twice-a-decade legislation that funds U.S. agriculture subsidies — prioritized loan and insurance programs for other row crops. As corn and soybean prices rose, elevators stopped taking train cars of oats. Acres of the unshowy cereal grain plummeted.

“A lot of things conspired against oats,” said Randy Strychar, president of Oatinformation, an industry analyst. “What money was spent on oat research was staggeringly small … compared to corn and soybeans.”

By 1970, Minnesota farmers still grew 3.5 million acres of oats. But by 2020, that number dipped below 200,000 acres.

Meanwhile, up north, Canada’s oat fields boomed. Cooler temperatures nurtured a consistent crop year after year. The slightly drier climate meant less disease. Soon, trainload after trainload arrived from the northland into the U.S. to become children’s morning porridge.

Today, the U.S. is the largest importer of oats in the world. But the Upper Midwest still has the milling.

General Mills, the Twin Cities-based cereal maker, processes oats at giant mills along the rail yard east of the Mississippi River in Fridley. Quaker Oats, the Chicago-based subsidiary of PepsiCo, operates the world’s largest cereal plant in Cedar Rapids, Iowa. Both of these companies purchase oats from farmers outside the U.S., largely Canada, say analysts.

“It’s pretty well understood in the industry if you want oats for food, you get them from Canada,” said Paul Werner, owner of Dundas, Minn.-based Werner Seeds, a company that buys oats for animal feed. “Our summers vary too much.”

So it’s against this formidable backdrop the oat mafia in Minnesota’s Driftless Region has emerged. Larsen said he’s tried, to no avail, to get General Mills’ attention.

“If we want a change, we need buyers of oats,” Larsen said.“And it makes me angry. We are taking a risk by doing things differently. A substantial risk. They need to back us up instead of continuing to buy oats out of Canada or Australia or anywhere but here.”

In an email, General Mills said ingredients are largely sourced from Saskatchewan and Manitoba, as well as smaller portions from North Dakota and northern Minnesota.

Quaker did not respond to multiple requests for comment for this story.

What’s left for oat farmers in southern Minnesota is a smattering of smaller millers or elevators that process oats for livestock feed or seed. One food-grade oat plant, owned by Eden Prairie-based Grain Millers, churns in St. Ansgar, Iowa. Many of Larsen’s farmers deliver oats to St. Ansgar, which in turn sells oats to a range of food companies.

Still, the lack of competition, farmers say, leaves them suspicious they’re not getting a good price for their commodity.

Shea-Lynn Ramthun, a Cannon Falls, Minn., farmer, who was one of those converted by Larsen’s farmer-to-farmer talks, remains optimistic about oats, so long as more processing comes online.

“That shortage of oat milk was not a shortage of oats, but a shortage of processing of the oats,” Ramthun said, referring to sourcing problems over the past couple of years to meet oat demand.“There is a lack of competition. [St. Angsar] is the only place that we can go to bring our oats at this time.”

Cows graze in a field inter-seeded with oats and clover at Flying J Farm in Cannon Falls on Tuesday. The combination of oats and clover helps pull nitrates out of the soil and makes for a significant reduction of nitrogen needed when planting corn the following year. (Alex Kormann/The Minnesota Star Tribune)

A crop they know

On a recent September morning, Ramthun sat on a patio just a short distance from her family’s old barn, looked out beneath her baseball cap at green clover — a cover crop — where she’d harvested the oats in summer. It’ll be pasture for her cattle.

“Oats are a less input-heavy crop,” she said. “The following year, when you follow with corn, you don’t need as much nitrogen. So now we’re not leaching nitrogen, which means cleaner water, healthier soils.”

And healthy for people, too, a fact that’s helped fuel oats’ moment in the 2020s, as a plant-based dairy alternative. Nationally, in 2022, oat production nationwide jumped 45%. A year later, the U.S. Department of Agriculture expanded an insurance program to protect oats against price drops.

Meanwhile, oat processing has been returning to Minnesota. In 2020, SunOpta, the Eden Prairie-based food company, invested $26 million into its Alexandria, Minn., plant to making oat milk. This year, Minnesota farmers anticipate nearly 8 million bushels of oats — a 15% yearly increase.

Just this month, Landon Plagge, owner of Green Acres Milling and a farmer from Latimer, Iowa, announced that he will be bringing a new, farmer-backed oat processor to Albert Lea, Minn. He said they plan to open up in the next two years and handle 3 million bushels of oats a year, employing two dozen people.

“I just see the need for farms to move beyond commodity producers and actually produce food that people eat,” Plagge said.

While the University of Minnesota and others develop the next generation of super crops, nitrogen-fixing oilseeds and greenhouse-gas-trapping wheatgrasses, oats are approachable for farmers. Their grandfathers grew oats. They don’t need a new planter. And they can do some of the same things the experimental crops do.

And there isn’t much time to waste. In the Driftless, officials have estimated more than 9,000 residents across the region drink water with unsafe nitrate levels. Locals say it’s long past time to get serious about making change.

From his combine rumbling over the field, Larsen is adamant.

“Oats, or small grains, or something other than corn and soybeans, is part of the only way we’re going to fix [nitrate leaching],” he said.

Larsen’s combine approaches the 50-foot prairie grass buffer from the Zumbro. It’s a landscape where farming and water are intimately intertwined. And his ancestors up on the hill wouldn’t have thought twice about growing this mighty plain grain.

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