Less lentils, more flax: farmer survey

Flax acres are forecast to rise 19 percent, while a 25 percent drop in lentil acres surprised many analysts

Canadian pulse crop seeding intentions for 2017 are down more than analysts expected but in line with what the trade was thinking.

According to Statistics Canada’s March survey of 11,600 farmers, growers plan to seed 4.39 million acres of lentils, down 25 percent from last year, and 3.99 million acres of peas, a six percent reduction.

Jon Driedger, senior market analyst with FarmLink Marketing Solutions, said the lentil number surprised analysts. The average pre-report estimate was 5.1 million acres, down from 5.86 million last year.

“That was a bigger drop than just about anyone was expecting,” he said.

Colin Topham, managing director of Agrocorp International, said the lentil number was very much in line with trade expectations.

“There is no question that after being on a long run of supply growth you’ve got to take a breather,” he said. “A lot of guys pushed their rotations last year.”

Topham said lentils have been hard to move because of quality problems and stiff competition from other exporters such as Australia, so an adjustment was necessary.

There was no breakdown by class, but Stat Publishing said the numbers suggest 3.21 million acres of reds and 1.14 million of greens.

Stat expects a 1.2 million acre drop in reds, a 232,000 acre decline in large greens and a 38,000 acre reduction in small greens.

Topham disagreed with the large green estimate. He thinks those acres will be retained because of good returns.

Driedger believes one of the reasons the lentil number was so low is that the survey was conducted in the last half of March when the pulse industry was still under threat of losing access to the Indian market over a non-tariff trade barrier.

“There was a bit of a cloud over the pulse sector during that time,” he said. “Some of that stuff has been cleared up since then.”

That’s why he believes lentil acres will be higher in subsequent reports.

Stat said there is a tendency most years for lentil acres to rise between the first and final estimates of the crop.

They have climbed an average of 16 percent over the last five years.

Stat believes lentil acres will once again be higher than the intentions estimate but not by 16 percent. The increase will be smaller than average because the crop is losing ground to soybeans in Saskatchewan due to root rot concerns.

Chuck Penner, analyst with LeftField Commodity Research, said the guesswork with pulses was harder than usual this year.

“I knew it was a bit of a crapshoot, especially on lentils, because the price signals are saying one thing but last year’s disease problems were saying the opposite,” he said.

Penner said a large lentil carryover from last year and a return to average yields would offset the drop in acres. Stat Publishing expects 3.23 million tonnes of supplies, which is only three percent lower than 2016.

However, the supply of No. 2 or better lentils could still be constrained.

“The quality of that carryover is pretty lousy,” he said.

Penner believes pea supplies could be tight in 2017 if growers harvest an average crop compared to the second biggest yield on record last year.

Driedger has no problem with Statistics Canada’s pea number. He expected a slight increase but is fine with the small decline.

“New crop pea prices are OK but not as sexy as they have been,” he said.

Topham thinks the pea number is reasonable, despite being the second biggest crop on record.

“The demand situation with peas has been very robust and it looks to continue that way,” he said.

Stat Publishing expects 3.45 million acres of yellows and 520,000 of greens. Topham thinks greens will be closer to 400,000 acres.

Chickpea plantings are expected to fall 13 percent to 140,000 acres. Beans will drop slightly to 260,000 acres. Driedger said they are both such small acre crops that he doesn’t put much faith in the Statistics Canada numbers because of the sample size.

“It really lends itself to big revisions going forward,” he said.

Flax acres are forecast to rise 19 percent to 1.12 million acres. Penner thinks it could end up a little larger than that. He was surprised to see canaryseed climb four percent to 270,000 acres because prices have been dismal, but growers are looking for a cereal crop that won’t be ravaged by fusarium.

Mustard plantings are forecast to plummet 26 percent to 390,000 acres. Penner thought it would have been even lower because of poor prices, while Driedger was surprised by the magnitude of the drop.

Sunflower seed is forecast to be down 29 percent to 50,000 acres. The small sample size argument is even more pronounced for this crop than chickpeas and beans.

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