U.S. farmers intend to plant a lot more pulses in 2012 than they did last year, but the acreage increases are deceiving.
The numbers are skewed because growers in North Dakota, which is by far the biggest pulse growing state, were unable to seed their peas, lentils and beans last year because of excessive spring moisture.
“If they had grown what they intended last year, we would be talking about an acreage decline in lentils and perhaps even in peas,” said Brian Clancey, editor of the Stat Publishing markets newsletter.
The U.S. Department of Agriculture said in its March 30 Prospective Plantings report that growers intend to seed 1.7 million acres of beans, 619,000 acres of peas, 518,000 acres of lentils and 184,000 acres of chickpeas.
Total planned pulse acreage is up 40 percent from last year, but upon closer inspection, the acreage for all pulses except chickpeas will be lower than 2010.
The bean number is 38 percent higher than 2011 plantings but well below the 1.9 million acres seeded in 2010.
“I was thinking (beans) might have gone up a little bit more than that because really, beans have performed extremely well. They’re one of the better crops in terms of income,” said Clancey.
However, beans face stiff competition from corn, soybeans and wheat, which are easier crops to produce, harvest and market.
Pea plantings are expected to be up 71 percent, but Clancey said 2004 was the last time growers planted fewer than 750,000 acres of the crop.
“Yeah, acreage is up a lot in the United States, but this is not a big crop coming,” he said.
North American pea stocks are “effectively sold out” and it appears they will remain tight in 2012-13.
Lentil plantings are expected to jump 21 percent, moving in the opposite direction of Canadian acreage, which Agriculture Canada expects to fall by 13 percent.
“The U.S. government has been a fairly good buyer of lentils for food aid, so you have that extra market dimension there that exists in the United States,” said Clancey.
Chickpea acreage is expected to rise 38 percent from 2011 and 26 percent from 2010.
Clancey said that will make markets happy, but the biggest increase is for small chickpeas, which is a bit of a surprise because the market is in need of large caliber kabulis.
Murad Al-Katib, president of Alliance Grain Traders Inc. (AGT), said the demand outlook is improving for pulses.
Exports have been constrained of late, primarily by a lack of available credit in key consuming regions. Currency devaluation and political unrest in the Middle East and North Africa haven’t helped matters.
However, he sees a brighter future.
“The market must come back to normalized purchasing soon. They cannot hold off indefinitely,” Al-Katib told reporters and analysts during a conference call announcing the company’s fourth quarter financial results for 2011.
Turkish red lentil and chickpea production has been declining the past few years and is expected to fall again in 2012. Lentil output is forecast at 400,000 tonnes and chickpea production at 450,000 tonnes, the lowest level since 2007.
India’s pulse production is estimated at five percent below the record 2011 harvest, but AGT believes the government forecast is overly optimistic.
Market intelligence gathered by AGT indicates demand for pulses in neighbouring Bangladesh, Sri Lanka and Pakistan will increase in 2012 because of depleted local market stocks that need to be replenished.
“AGT management is optimistic that the positive demand fundamentals for pulse imports to Indian Subcontinent markets may materialize in the second half of 2012,” the company said in a document accompanying its fourth quarter results.
However, AGT warned of increased competition from Russia and Ukraine. Russia’s pulse production was up significantly in 2011, and the USDA expects a further increase in 2012.
Legumex Walker Inc., another major Canadian pulse processor, issued a similar warning while announcing its fourth quarter results.
“We believe there are structural changes at work. We’re seeing increased competition from processors in emerging pulse producing countries such as the Ukraine, Argentina and China,” said company president Joel Horn.