First Look at Australian Pulse Prospects

Canadian farmers aren’t the only ones watching pulse crops emerge and develop. Australian farmers are also well underway planting their crops and the first official acreage estimates have been released by ABARES, the government agency. It turns out pulse crops aren’t just popular in western Canada. Last year’s bumper yields in Australia and strong prices provided some amazing returns and that’s encouraging acreage in 2017.

Australian farmers were particularly pleased with last year’s performance of chickpeas (mostly desis) and lentils (mostly reds). Seeded area last year was already up, but 2017 acreage is expected to climb a little more. The ABARES estimate of chickpea area is 2.7 million acres, 3% more than last year and lentil acreage is forecast to rise 26% to 950,000 acres. There was less exuberance about peas and fababeans, with seeded area forecast to decline 5% and 9% respectively.

Despite the larger acreage for chickpeas and lentils, it’s very unlikely to see bigger 2017 crops. Last year’s Australian yields were of the once-in-a-lifetime variety. For example, Australian lentils yielded 2,430 pounds per acre in 2016, far beyond the previous record of 1,550 and more than double the previous 5-year average of 1,190 pounds per acre. A repeat this year just isn’t going to happen.

Early in the growing season, there are already concerns about dry conditions with below average rainfall in most parts of the country. That includes eastern Australia where most of the pulses are grown. That can turn around in a hurry, but it doesn’t look like the planets will align for a second straight year of extremely high yields.

So far, ABARES is using more typical yield forecasts for its 2017/18 production projections. Chickpea production is estimated at 1.42 million tonnes versus 1.85 million last year. For lentils, the crop is estimated at 530,000 tonnes, the second-largest ever but well below last year’s 830,000 tonnes. Fababean production is expected to decline 28% to 370,000 tonnes while the pea crop is forecast to decline 38% to 260,000 tonnes.

But even without a bumper crop, Australia’s pulse crops will still be large enough to influence the market. The country is emerging as a larger player in global trade, especially in desi chickpeas (which can influence the yellow pea market) and red lentils. The chart below shows how Australian red lentils have taken a much larger bite of the export market this year.

These production forecasts tell us Australia has become a key player in several pulse markets and won’t likely go away anytime soon. Farmers’ positive experiences growing and marketing their pulses mean that these crops have established themselves within Australian crop rotations. That shouldn’t be a surprise for Canadian farmers who started down that path a few years ago.

Pulse Market Insight provides market commentary from Chuck Penner of LeftField Commodity Research to help with pulse marketing decisions.