Price for Canadian Pulse Crops Affected by Many Factors (PCN Fall 2014) SEP 25 2014 | Consumers and Producers | Pulse Crop News
This article appeared in the Fall 2014 issue of Pulse Crop News.
Charlie Pearson, Alberta Agriculture and Rural Development
International crop prices over this past summer continued their move lower as the world deals with average production in most of the major crop producing regions. The 2014-15 crop year is turning out to be a year where more crop will be produced than is consumed. The overall declines in international crop values will set the tone for Alberta pulse prices.
What factors are influencing world pulse markets?
India has continued to be an aggressive buyer of Western Canadian pulse crops reflecting increased imports to feed their growing population, and concerns about a dry start to the monsoon season for their Karif crop (summer season). The results of the Indian rabi season crop (crop harvested in February and March) will be the factor determining import needs in 2015. Chinese imports of Canadian peas continue to grow at a rapid pace.
Canadian pulse crops in general, and more specifically peas and lentils, had smaller carryovers than expected as a result of the larger than anticipated export volumes in 2013-14. Canadian lentil and pea production is estimated by Statistics Canada to be 1.9 million tonnes and 3.6 million tonnes respectively in their first crop production estimate of 2014. Pea production continues to grow in Alberta with the 2014 crop likely to exceed one million tonnes for the third consecutive year.
Current prices in late August for green peas for human consumption are about $8.50 per bushel ($310 per tonne) and $6.35 per bushel ($235 per tonne) for yellow human consumption peas. Given the increases in green pea acreage, the premium over yellow peas is expected to decline this fall. The wild card in green peas will be crop quality and the level of bleaching.
Prices for all classes of top grade lentils are running about 23 cents per pound ($500 per tonne). Green lentil acres were significantly down this year. The tighter supply situation will support prices over the coming winter. Red lentils reflect opportunities in a larger and more diverse world. The challenge for Canada will be marketing the larger 2014 red lentil production.
Marketing strategies for pulses
Early in October, Western Canadian pulse will have good estimates of field pea and lentil production numbers and, equally as important, quality. The next steps will be to evaluate your marketing plan based on the volume of peas and lentils you have already sold, the marketing plans for your other crops, and your planned sales for the coming winter.
Given the smaller size of the 2014 Western Canadian crop, the grain handling and transportation system should operate more smoothly in the coming winter. Export volumes out of the west coast will remain large, however, with pulses needing to compete with other crops for logistic capacity. Good communication with your domestic buyers to identify logistic windows for delivery remains important.
Charlie Pearson is a Provincial Crops Market Analyst with the Competitiveness and Market Analysis Branch. He can be reached at firstname.lastname@example.org.