Pulse Market Insight #142 JAN 27 2017 | Producers | Pulse Market Insights
What’s Happening with Faba Beans?
In spite of the modest size of the Canadian faba bean crop, there’s been interest in growing the crop the last few years. That’s likely because farmers are always looking for profitable cropping alternatives and faba beans have a number of desirable characteristics. The disease issues faced by some other pulse crops in recent years have added to the attention on faba beans.
There seems to be a fair amount of information about growing faba beans, but fewer resources when it comes to marketing the crop. That dilemma is pretty normal for any up-and-coming crop which doesn’t have a long track record, at least here in Canada.
Canadian faba bean production ramped up sharply in 2015 but took a small break in 2016, partly because of production challenges the year before. Exceptionally strong 2016 prices for peas and lentils didn’t help either. Acreage data is “patchy”, but from what we can determine, faba bean seeded area in western Canada was somewhere around 90,000 acres in 2016, down roughly 40% from the year before.
While acreage was down, yields were much better than the year before. StatsCan showed that in Alberta, the average yield was 49 bu/acre, 25% better than year before and that helped offset the reduced acreage. Our estimate for the prairie-wide crop in 2016 is 110-115,000 tonnes compared to roughly 150,000 tonnes the year before.
Farmers in other countries have also been showing interest in faba beans the last few years. Production has been rising in places like northern Europe and the Baltic region, on top of the established countries of France, the UK and Australia. This has added to global supplies and increased competition into the main export market of Egypt. This year, the biggest jump occurred in Australia where production is estimated to have hit 500,000 tonnes.
Because there’s more global production trying to find a home in limited export markets, it’s no surprise prices have declined. In the UK, prices had already dropped earlier in response to a favourable 2015 crop while French prices dropped as the 2016 harvest approached. Australian prices also fell during harvest but in recent weeks, few buyers are issuing bids, which suggests they’re not interested in buying more of the 2016 crop, not exactly a positive sign.
That heavier competition in global markets means most Canadian faba beans will need to be consumed domestically. A few thousand tonnes have been exported so far in 2016/17, but well below the previous year. As a result, the feed channel is the main outlet and that means faba bean prices are tied to other protein feeds, especially feed peas.
Publicly available bids are few and far between, but most are seen in the $5.50-6.00 per bushel range. This tends to be at a small discount to feed peas as faba beans are a little less of a known product and volumes aren’t quite large enough to provide a regular source in feed rations. That discount may shrink in future years if faba bean production expands, especially since protein levels are higher than peas.
Longer-term, there are other opportunities to expand faba bean markets. Domestically, more processing such as hulling and fractionation would open up other uses in food and feed products. Globally, destinations besides Egypt can be developed. This year, small volumes of Canadian faba beans have been moving into India and that could signal more opportunities down the road.
Pulse Market Insight provides market commentary from Chuck Penner of LeftField Commodity Research to help with pulse marketing decisions.