Resurrecting Oats in the American Midwest

There’s going to be a point in our time together—and maybe that point is now—where you ask, “Why am I reading about regenerative agriculture on an oat drink company website?” This is a fair and understandable reaction.  But in reality, this article is much more than that. It’s a pretty thrilling read (yes, we find oats thrilling!) where seemingly disconnected storylines—like the story of a third generation Minnesota farmer, some Oatly employees, a group of impressive agricultural organizations, and oats—come together to upend the American agricultural system and Oatly’s supply chain, all for the betterment of the climate. Or at least, that’s the hope.

“Why are all our oats coming from Canada?"

It started in 2018. Sara Fletcher, the communications and public affairs director at Oatly, was thinking about the question she often got from North American consumers, “Where does Oatly source its oats from?” Krista Kane, the director of coffee channel development, was pondering the same question. The answer revealed that none of our oats were coming from the United States, but rather from Canada. Most people would have simply said, “Cool. Canada is cool. They’re friendly over there.” But Sara and Krista asked why. 

Turns out there’s a reason for this. It’s not that we had some weird falling out with American-grown oats. It’s a product of the American farming system.

Over the past half-century, American farms kept planting more and more corn and soy because that’s where the money was. “I’m from Ohio,” says Sara. “You look to one side during the summer, and you see corn. Look to the other side, you see soy. The entirety of the Midwest is mostly corn and soy.” That’s because these crops can be grown in huge quantities, shipped all over the world, and used in everything from biofuels to plastics to animal feed. But there’s a cost to this approach. Instead of spending the next three pages outlining this cost, let’s distill it into a bulleted list of ominous environmental realities:

• Growing only corn and soy drains soil of its nutrients
• It encourages certain weed and pest problems
• It can eventually make huge swaths[1]  of land unfarmable
• As a result, farmers have to turn to nitrogen fertilizer, herbicides and pesticides
• This eventually runs off into the surrounding ecosystem which can be disastrous

There is a solution. Research shows that adding a grain like oats (along with cover crops) can actually improve the land and reduce disastrous runoff. The problem is that farmers have no financial incentive to do so, given the market for such crops is so weak. This is when Sara and Krista raised the big “What if?” question. “What if’s” usually get brought up in company meetings and then fizzle out over endless email exchanges. This “what if” did not: What if we told farmers in the Corn Belt that if they worked oats into their crop rotation, we would buy them?  And over time, we’d also collect data about the effects of growing those oats on soil health, water quality, and emissions. 

The Iowa Pilot Project is Born

There were farmers already working to break the corn-and-soy cycle. Ben Dwire was one of them. He’s a third generation farmer in Arco, Minnesota. “The idea of soil health never even came up in school. I’d never really heard of it before. But you start reading about it, and ask, ‘why are we only raising one crop here?’” Crop rotation and regenerative agriculture, though a rare practice in Ben’s farming community, is not a new idea. “I’ve been looking back at some of the literature from the 1930s and 1940s. This was a pretty standard practice back then. These are things my grandpa and great-grandpa all did.”

In addition to farmers like Ben, there were also organizations like Practical Farmers of Iowa and Sustainable Food Lab who were focusing on adding grains for animal feed into crop cycles. We called them up and had a wildly exciting conversation about what a partnership could mean for their respective organizations, farmers, Oatly’s supply chain, and more broadly, agriculture in the U.S. The abridged version of this call was as follows: 

We started the pilot with four farmers who wanted to move away from solely planting corn, including Ben. Over the course of the year, we facilitated conversations between them, collected data and tracked progress, and even flew out to Arco to check on the oats and take some of the beautiful photos you see here.  “You start going to soil health meetings to learn about this stuff and seeing the same group of farmers, and you get to be friends,” said Ben. “I didn’t have this whole network when we started. I’m glad we have it now.” 

Each year, we’re adding a new crop of farmers to the group (that’s a horrible farming pun and we should be fired). Last year we had 17 farmers who each started a three-year growing cycle: oats and a cover crop, corn, then soy. At the end of each cycle, we’ll receive data about whether that cycle is improving the health of those farms. We’re not great at math, but if you are, you know that we only have one set of data (and one harvest of oats) so far. Julie Kunen, director of sustainability for Oatly North America, representing the cautious optimist in this article, wants to be clear that it’s a small data set, and we have much more to collect. “That said, it does seem to be trending in the direction we would want it to, in terms of the benefits of integrating oats.”

But for now, or until Julie reads this latest draft, let’s throw cautious optimism to the wind. This program could be a profound gamechanger for everyone involved: farmers, Oatly, oat drinkers, and the Midwest’s long abused soil.  Our farmers get a new source of income and a network of like-minded peers. Over time, we see healthier soil. And finally, Oatly consumers get a product that’s good for the earth. 

Where do we go from here?

Everything we do next is fueled by an ambitious goal. By 2029, we want 100 percent of our supply of critical raw materials like oats to be sourced in a regenerative way. In order to do that, we’re going to aggressively expand initiatives like our Iowa Pilot Program. More farmers, more partnerships, more data, more oats, more, more, more. (Oh man, we sound like greedy oat capitalists!) 

“We're in the process right now of moving from a zero-sum, ‘let's not do damage’ sustainability concept to the new-ish concept of regenerative agriculture, which is building it back better,” says Julie. “Improve soil health, improve agriculture, improve farmer livelihoods.”