Analysts say pea, lentil acres don’t make sense

Statistics Canada estimates for the crops are on the light side and some forecast a big revision in the June report

The pulse industry was taken aback by Statistics Canada’s first stab at estimating 2015 pea and lentil acreage.

The March seeding intentions report released on April 23 calls for 3.83 million acres of peas, up one percent from last year and 3.35 million acres of lentils, an eight percent increase.

That is a far cry from pre-report expectations from analysts who were forecasting a six percent hike in pea acres and a 16 percent increase in lentil plantings.

Industry was also anticipating more pulse acres. Murad Al-Katib, president of AGT Food and Ingredients, one of the biggest pulse processing firms in the world, expects a 15 percent increase in both peas and lentils.

Greg Kostal, president of Kostal Ag Consulting, said the seeding intentions do not make sense given the strength of pea and lentil prices and the demand-pull market created by India’s production problems.

“The trade perceives those numbers to be light,” he said.

Marlene Boersch, managing partner with Mercantile Consulting Venture, thinks the survey of 11,500 farmers conducted during the last half of March doesn’t make much sense either.

Lentil and pea prices are strong, exports have been brisk and carryout should be low, which can’t be said for competing crops like wheat and canola.

“The ability to actually move your crop and get to a lower carryout has been unprecedented in pulses relative to the other crops,” she said.

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Based on weekly rail car loading statistics, Boersch expects carryout for wheat and canola will be much higher than Agriculture Canada is forecasting.

That is why she is sticking with her estimate for four million acres of peas and 3.6 million acres of lentils.

Stat Publishing says there is often a wide variance between Statistics Canada’s March seeding intentions report and its actual seeded acreage report that comes out in June.

Over the past three years, lentil plantings have increased an average of 13 percent between the two reports while pea acres have climbed two percent.

Boersch expects big revisions in the June report. She thinks the 16 percent increase in durum plantings will shrink with some of those acres going to wheat, lentils and peas.

Kostal is adding 250,000 acres each to Statistics Canada’s pea and lentil numbers.

That would result in four million tonnes of pea production using average yield estimates, up from 3.5 million tonnes in 2014-15.

He is forecasting 3.3 million tonnes of yellow peas, up from 2.7 million tonnes and 700,000 tonnes of green peas, down from 800,000 tonnes.

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Kostal expects 2.3 million tonnes of lentil production, up from 1.8 million tonnes in 2014-15.

That will comprise 1.6 million tonnes of red lentils, up from 1.28 million tonnes, 500,000 tonnes of large greens versus 400,000 tonnes and 175,000 tonnes of small greens, up from 120,000 tonnes.

The biggest increases will be yellow peas and red lentils due to production and quality problems with India’s rabi (winter) crop and a poor monsoon rain outlook that could reduce kharif (summer) prospects.

The India Meteorological Department forecasts monsoon season rainfall to be 93 percent of the long-term average due to weak El Nino conditions prevailing over the Pacific Ocean.

Below average monsoon rains would reduce kharif production and would likely result in fewer pulses going in the ground during the rabi season, which is what happened this winter.

Stat Publishing said given the monsoon forecast it is likely India will import four million tonnes of pulses per year right through the end of 2016, a large portion of which would be Canadian yellow peas and red lentils.

Contact sean.pratt@producer.com

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