Rotationally Raised, Episode 9: Markets, Challenges and Opportunities

Marketing can be challenging for any crop, especially when commodity prices are low. But for small grains, the number of elevators that will even have bids out for most small grains is limited. Because Iowa farmers recognize the benefits of adding a third crop to their farm, they are finding both traditional markets and on-farm uses for the crops. On this week’s episode, PFI farmers talk about those challenges and opportunities marketing small grains.

Small Grains Markets

Just a few decades ago, nearly every farm in Iowa used oats and you’d never struggle selling a crop, whether you were near a food grade market like Quaker Oats or General Mills or you simply sold it to a local feed mill. You might not have always liked the prices, but, at the end of the day, someone would buy it. Today is a different story.

For the past couple years, we’ve started compiling a list of businesses – the Small Grains Business Directory – that buy small grains around the region. For farmers close to those markets, selling to one of those buyers as a bulk commodity may be the easiest option. For others, using for cover crop seed, livestock feed or direct marketing may be a more profitable use of the crops.

Jon Bakehouse of Hastings says that one way to put small grains to use is to replace your cover crop seed and maybe sell some to your neighbors. “Really, our main purpose for growing and harvesting small grains is to save for our own use for planting as a cover crop for feeding to livestock,” he says. “We have sold some of our small grains right off the combine,” he adds and says that that “inter-neighbor market” can work well if several area farmers are interested in cover crops. And if you plant cover crops on lots of acres, the cost savings of producing your own seed can be real, depending on how much you currently pay for cover crop seed.

Earl Canfield of Dunkerton says that you’ll be more successful selling products from a small grains crop – both the grain and the straw –  when you put time in to understanding the market. “We’re trying to understand what consumers of oats in Iowa are looking for,” he says, “Where are they buying their oats from today? Why did they buy them where they’re buying them? Is it simply because that’s the only option available?”

Earl and his family have recently started to sell oats and straw directly to consumers from their farm. He says it’s important to communicate to end users of small grains products that it’s important for Iowa farmers to be able to have markets for small grains, so they can grow them on their farms and help protect soil and water. For more information on profitable straw production, see Alisha’s recent blog on the topic.

Regardless, of the end use of the small grains, it’s a good idea to have that in mind from the start. “You do need to have a place to go with them before you plant them,” suggests Vic Madsen, who farms near Audubon in southwest Iowa. He says marketing oats will be a challenge until the hog and cattle industry begin using the crops in a big way. Vic grows organic small grains, and has sold to various places over the years. Lately, he has sold organic oats to Grain Millers. He also includes small grains in feed rations for his hogs and cattle.

Next week, we’ll talk more in depth about how small grains can fit into a livestock operation, and hear from farmers who include small grains in rations, plant diverse grazing mixes following small grains harvest, and use the straw for feedlot and barn bedding. For more information on small grains, check out practicalfarmers.org/small-grains.