Farmers Left Holding the Bag as Company Cancels Gluten-Free Oat Contracts

Celiac.com 03/28/2023 - A food ingredient company in Regina, Canada, is walking away from gluten-free oat contracts it signed with about 30 farmers in northeastern Saskatchewan in 2022. The numbers are still just estimates, but, with the production contracts voided, it’s possible that the affected producers could lose $4 to 5 per bushel in the price of their oats.

Purely Canada Foods, a division of Above Food, sent a letter to affected producers March 1. The Western Producer obtained a copy of the letter. It states that Purely Canada Foods is using “force majeure” to dissolve the contracts because the processor it had a contract with is unable to take the oats.

• “There were 21,000 tonnes of certified Gluten-Free oat conversion capacity… contracted for Gluten-Free processing,” the letter stated. “Unfortunately, the contractor experienced Gluten-Free and food safety certification delays, a substantial equipment failure… as well as substantial delays caused by start-up & commission issues.”

Purely Canada Foods Could not Find Another Processor to Take the Oats

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“These failures were beyond the Buyer’s (Purely Canada’s) control,” the letter said. “Despite all efforts in finding a certified Gluten-Free oat conversion processor… there is no immediate solution.”

As a result, the company sent a letter to the affected farmers in early March.

“The Buyer gives you immediate notice that the Gluten-Free Supply Contract is void in respect to the purchase of the oats and storage of the same,” it says. “Please consider that the Force Majeure clause applies for the purposes of the Contract of the Buyer and conversely the Seller, and you as Seller, will be released from obligations under the Contract.”

Read more at Producer.com