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Pulse Market Insight #234 JUL 7 2023 | Producers | Pulse Market Insights

Acreage Numbers the First Step in the Outlook

While weather conditions in western Canada have become the main story in this year’s market outlook, it’s still worth stepping back and looking at what StatsCan had to say about 2023 seeded area. That’s especially the case since its first acreage estimates in April were based on a survey way back in December and January.

On June 28, StatsCan released its updated acreage numbers, based on a large farmer survey conducted when seeding was in its late stages. Some of its estimates confirmed earlier ideas, but there were a few surprises, including some seen in the finer detail by crop type.

According to StatsCan, 3.04 mln acres of peas were planted this year, 10% less than 2022 and well below the 5-year average of 3.89 mln acres. Seeded area dropped the most in the eastern prairies while Alberta acres were down less than 5%.

While the 10% drop in total pea seeded area was mostly expected, it was a bit of a surprise that StatsCan showed seeded area of yellow peas down only 6% while greens and other classes were lower by 25-30%. Green and maple peas had been showing large premiums versus yellows heading into the planting season, but that didn’t seem to sway farmers’ decisions. If true, this would set the stage for much tighter supplies of green and minor classes for 2023/24.

The StatsCan estimate for lentil plantings came in at 3.67 mln tonnes, 15% less than last year and below the 5-year average of 4.06 mln acres. While we had heard rumblings of large drops in lentil acreage, we had thought that as prices firmed heading into the spring, the acreage losses would be tempered.

The overall 15% drop in lentil plantings broke out very differently by type. According to StatsCan, red lentil area dropped by 28% while all other classes actually saw an increase, including 19% more large green lentils. The stronger price signals for green and minor classes of lentils seem to have influenced farmers’ planting decisions. This shift may turn out for the best, as there are early signs of weaker demand for red lentils but stronger interest for greens in 2023/24.

Seeded area of chickpeas rose more than we expected, hitting 316,000 acres, a 35% increase from last year and the largest acreage base since 2019. This was a bit of a surprise, as planting of the 2023 crop ran up against crop insurance seeding deadlines, which could have limited acreage. This increase in acreage shouldn’t be very negative for the market, as Canadian supplies were already very low and needed to be rebuilt.

Dry bean acreage was reported at 318,000 acres, 7% more than last year and up considerably from StatsCan’s earlier estimate of 257,000 acres. Even though seeded area is higher than last year, it’s still far below the 5-year average of 385,000 acres. As such, that’s not going to cause heavy supplies, especially since seeded area in the US is also lower for 2023.

As mentioned in the title of this report, the acreage is only a first step in sorting out the supply situation for 2023/24. Yield potential is just as (or even more) important and dry conditions are raising serious concerns. And beyond that, the demand side of the equation still needs to be sorted out.

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