Bad weather hurts crop Big N.American crops offset benefit of small Argentinian production
Argentina is dealing with its second straight green pea crop failure, but this one won’t likely contribute to a price spike like last year, says an analyst.
“At first it looked like just the yields would be down because of the drought,” said Chuck Penner, analyst with LeftField Commodity Research.
“Then they got the rain on top of that, so then that added to the quality problem.”
Stat Publishing reports that a large percentage of the crop has between seven and 15 percent bleached seed due to excess late-season rains.
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Argentina’s absence from export markets in 2012-13 helped push green pea prices above 17 cents per pound last year, which is by far the highest price in the last 10 years.
Penner said this year’s quality problem is as bad or maybe even worse than last year but he doesn’t anticipate a similar price response. Last year there was a poor green pea crop in Argentina as well as North America.
“The difference this year is that you do have a good Canadian crop and a good American crop,” he said.
Statistics Canada estimates that growers harvested 3.78 million tonnes of peas in 2013, 13 percent more than last year. Stat Publishing sees a record 4.08 million tonnes of peas.
The U.S. Department of Agriculture is forecasting 707,657 tonnes of peas, up 43 percent from last year.
Pea production statistics are not broken down by type but Penner has done his own calculations based on Statistics Canada’s June breakdown of yellow versus green seeded acreage.
“My estimate is probably larger than most anybody else’s. Mine is closer to 700,000 tonnes (of green peas). Others are below 500,000 tonnes.”
Greg Kostal, president of Kostal Ag Consulting, believes the crop will be 400,000 to 450,000 tonnes based on the perception that StatsCan overstated green pea seeded area in June.
Even using Kostal’s conservative estimate that is still a much bigger crop than the 327,500 tonnes produced in 2012-13.
Green peas are selling for around $12.50 a bushel, which is well below last year’s highs but still well above the long-term average for the crop.
“Some people are predicting the price is going to crash in the next little while,” said Penner.
“I think we might come in for a bit of a soft landing. I don’t see much more strength but I don’t expect it to all of the sudden collapse, either.”
