Large calibre kabulis | Processor plans to add cleaning and sizing equipment to facility this summer
A new pulse processing business hopes to revitalize the moribund chickpea market.
Colin Young is getting back into the business three years after a fire destroyed R Young Seeds, a processing plant in Mortlach, Sask., owned by Young and his parents.
The plant was the largest chickpea processing and exporting facility in the country, shipping 40,000 tonnes of product a year.
After the fire, Young took a job building and running the Agrocorp International pulse processing plant in Moose Jaw, where he kept a watchful eye on the chickpea processing business.
“What I saw over the last three years is that no processor dedicated attention to chickpeas,” he said.
Young thought somebody would take over the chickpea side of the pulse trade, but processors are heavily focused on lentils and only dabble in chickpeas.
So he decided to quit Agrocorp and start Midwest Investments with two partners: brothers who own a large farm in the area.
“We will dedicate ourselves to creating a presence for chickpeas, and that has to end up having net results for farmers,” said Young.
They are building a processing plant this summer near Moose Jaw that will size, clean, sort and bag kabuli chickpeas.
Temporary cleaning and colour sorting equipment is already in the facility, and the partners will add new cleaning and sizing equipment this summer to expand production.
“We want to be able to set up to move from a farm-based, small production (plant) into a full commercial facility,” he said.
The plant will specialize in processing large calibre kabulis, which Young believes will have more allure to growers because of better price prospects.
“I believe the chickpea market is evolving into a nine millimetre and over market and an eight mm and under market with a fairly significant price spread between those two calibres,” he said.
“I’m going to say a five cents per pound spread.”
Young estimated that half of this year’s chickpea crop in Canada will be planted to new large calibre varieties, such as CDC Orion and CDC Leader.
He is particularly excited about CDC Orion, which has agronomic characteristics similar to CDC Frontier, a variety familiar to experienced growers.
Midwest cleaned a large amount of CDC Orion seed bought from seed growers this winter.
The company kept 40 percent of the 10 mm seed, which it will market this summer. Young wants to prepare customers for what is coming be-cause this is the first time Canada has sold chickpeas that big.
The remainder of the CDC Orion seed was sold to growers for planting this spring.
Canada has been facing stiff competition in the small calibre chickpea market because of increased production in Russia and Argentina.
“What they’re producing is small calibre chickpeas, but they’re selling them incredibly cheaply, like 12 cents a lb. cheap,” said Young.
It’s why the market for small calibre kabulis has fallen below the 20 cents per lb. level in Canada, he added.
Unattractive prices and the lack of a dedicated chickpea processor have contributed to a lackluster sales program for the crop.
Canada exported 17,131 tonnes of chickpeas in the first seven months of 2013-14, down from 41,566 tonnes for the same period a year ago. By contrast, pea and lentil exports have been well above normal.
Growers are expected to carry more than 114,000 tonnes of chickpeas into the next crop year because of the dismal export performance, which is up from 42,000 tonnes the previous year.
It will lead to a significant contraction in spring planting. Statistics Canada is forecasting 100,000 acres, or about half the amount seeded last year.
Young expects 90 to 95 percent of those acres will be kabulis.
He believes the chickpea industry can be rebuilt by focusing on marketing quality large calibre product.
Midwest Investments intends to make chickpeas an easier crop to sell.
“I’m going to bring very simple clarity to marketing chickpeas. I offer across-the-board prices with a very simple discount schedule,” said Young.
“There are no clauses with minimum percentages of this and maximum percentages of that.”
There will be daily prices, no handling charges and up-front payment.
“When we buy grain, we will pay for it 100 percent when they deliver,” said Young.
“We’re putting in huge storage as well so that when we commit to taking grain, we’ll take it on time.”