Oats and Oatmilk

Owen Saunders has grown and harvested oats to produce chaff for the horse industry for many years. Robin Campbell is a retired cropping farmer (whose son grows oats on his property). Robin is also chair of NZ Functional Foods and is involved in an AGMARDT funded project to help develop oatmik as a business stream for Southland cropping farmers. Between them they represent the traditional and future uses of the Southland oat crop. 

In the 1990s Venture Southland, an economic development organisation, undertook a study of soils and micro-climates which provided a base of information on which higher quality land use decisions could be based.   A lot of Southland soil types are sensitive to sub-optimal management, as intensive farming on light land can lead to nitrates leaching into the aquifers. 

For example, intensive farming on heavy clay soils can lead to nitrates leaching through the drainage systems that cover the province, and phosphates are carried into waterways with sediment loss. 

Carefully monitored management systems can help mitigate these problems and that is what is envisaged with this project. There are around 190,000ha of land in Southland deemed to have high versatility or moderate versatility for arable production. 

Owen Saunders has grown and harvested oats to produce chaff for the horse industry for many years. Robin Campbell is a retired cropping farmer (whose son grows oats on his property). Robin is also chair of NZ Functional Foods and is involved in an AGMARDT funded project to help develop oatmik (made by fermenting oats) as a business stream for Southland cropping farmers. Between them they represent the traditional and future uses of the Southland oat crop.

Owen Saunders grows early oat crops and produces chaff for the horse industry, and has done for many years. Owen is a first generation farmer, who started growing and harvesting oats when he was 14. His maternal grandfather brought a (brand-new) chaff cutter in 1936, and he and his two brothers were chaff cutting contractors. 

Owen’s 150ha farm business at Winton is 85% oats. He grows 100ha of oats, all used for chaff production and sold into the horse industry. The 2017 summer season is his 51^st harvest. “I’m a fitter and turner by trade, but I always wanted to be a farmer. My father was a motor mechanic.” 

“I was trying to make some cash as a kid, and I grew four acres of oats 51 years ago. It nearly killed me. It’s a very labour intensive operation, as the oats are all cut with a binder and stoked by hand. I can’t meet the demand for chaff, because we do it the old fashioned way (and we get a better product as a result). Our harvest takes eight to 10 weeks with eight fit people. We use mainly young people now. It is a battle to get people to work in the season.” 

“From April 2016 my son Brendan has been working with me on the farm. We produce 25,000 35kg bags of chaff a year. We run our own trucks to the freight depots, with one truck a day doing deliveries.” Owen uses some really old gear in addition to his grandfather’s 1936 chaff cutter, including a 1940 binder and a 1950 tractor. 

Owen, says he is a fan of oatmilk. “Put half a cup of rolled oats in a bowl with two litres of water and a pinch of salt and leave it overnight on the bench, and strain out the oatmeal in the morning. It is very refreshing to drink. I was brought up drinking that. If you are real Scotch you would use the oats again for the next day.” 

Robin Campbell is chair of NZ Functional Foods and involved in developing an oatmilk industry in Southland. Robin believes that Southland oat producers could add value to their businesses by producing oats for oatmilk, which represents a huge opportunity in the healthfood market. 

“While we began this journey thinking about a dairy substitute we have gone far beyond that in our thinking. The whole idea of dairy substitute undersells the opportunity. When we look at the macronutrient composition of various drinks it becomes clear that oat milk provides the closest to the ideal human requirement, so its real future is as a health product.” 

Robin says Southland agriculture has swung between sectors. Until the wool boom of the early 1950’s there was widespread small scale dairying and through to the mid 1990’s, it was predominantly sheep farming. Now the pendulum has swung back to dairying. Robin believes this tendency towards monoculturism exacerbates agriculture’s inherent market, disease, biosecurity and currency risks, especially where the majority of production is sold off as commodities.   Diversification is a natural hedge against these risks, and in the search for alternatives for Southland oats has been identified. 

Robin says that round the world, in countries with latitudes similar to Southland (such as Finland, Scotland and Sweden) the best quality oats are produced. 

Robin says the process of making oatmilk is quite capital intensive. Oats are dehulled, ground and steeped with an enzyme added, and centrifuged. The enzyme is deactivated and a couple of natural additives introduced. Though that sounds simple we have seen some very smart technologies in action, like the ability to sort one grain (such as wheat and oats) from another. If approximately 6 litres of milk is produced from each kilogram of oats, that is equal to around 50,000 litres per hectare of oats grown. 

The crop waste is returned to the ground as straw while the hulls have a moderately high calorific value and can be used as a heat source. As well, the reject grain is a feed source. 

The process is easily scalable but scaling the packaging tends to be more difficult.   You can’t have half a packing line so the investment in that part of the process will tend to be a bit “lumpy”. 

Robin says they have completed an investment memorandum which can be shared with parties who are seriously interested and prepared to endorse the confidentiality arrangements entered into while developing the process.   “This provides potential investors with an excellent base upon which to do their own due diligence.   The amount of investment required will be quite variable depending on the approach any investor or consortium wishes to take.   Upfront costs would be greatly reduced by leasing arrangements of plant and/or buildings, and indications are that the cash flows will be strong enough to support that.   An investor with an established path to market would be able to reduce the time taken to achieve economic scale and therefore reduce the working capital requirement.   One way or another, a few tens of millions will be required to launch this.”