StatsCan Production Estimates are Lower but not Surprising

Earlier this month, StatsCan issued its first survey-based crop estimates for 2022. Its earlier estimates in August and September had been based on computer models using satellite images from mid-July and mid-August, respectively. There were numerous questions about those estimates, and it was helpful to get farmers’ responses this time around. Even so, there are still questions about these latest numbers. Keep in mind, these December estimates aren’t always final, as revisions are often made later.

For nearly all pulse crops, these updated numbers show lower production than earlier estimates. This shouldn’t be a surprise as crop conditions in July and August generally looked okay but once combines started rolling, some disappointing results were reported. That’s especially the case for pulses such as lentils and chickpeas, grown in the driest areas.

For peas, production was trimmed to 3.4 mln tonnes from 3.6 mln earlier. That drop was a little more than expected by the trade but isn’t a huge surprise. While this is a big improvement over last year’s 2.3 mln tonnes, the 2022 crop is still at the lower end of the last few years prior to 2021. These below-average supplies are providing some support for prices, but this year’s demand from China has also been quieter. As a result, pea prices haven’t shown a meaningful response.

The StatsCan estimate for lentils dropped more severely, from 2.8 mln tonnes in September to 2.3 mln in December. While most observers were looking for a smaller estimate, this decline was more than expected. The lentil crop is still far bigger than last year’s 1.6 mln tonnes, but 2022/23 supplies have tightened up. This will limit the size of the export program, with a bigger constraint for greens than reds. There are still lots of unknowns about lentil demand, but this makes the outlook a little friendlier.

A sizable drop was also seen in StatsCan’s chickpea production estimate. Back in September, the 2022 crop was pegged at 157,000 tonnes and that was dropped to 128,000 tonnes in this latest report. That’s a solid rebound from last year’s 76,000 tonne crop, but that’s a low bar. Chickpea production in 2022 is still far lower than the three years prior to 2021 and that means supplies will continue to tighten up further at the same time as strong export demand.

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