A fair chunk of Pulse Days 2007 was spent talking about competing crops.
Every speaker at the popular market outlook session touched on the dramatic impact the biofuel craze will have on wheat and canola acreage.
Marlene Boersch, managing partner with Mercantile Consulting Venture Inc., summed the situation up in her chickpea presentation.
In five years wheat and canola will need to occupy 46.4 percent of total Canadian acreage if those two crops are going to meet the anticipated canola crush and ethanol demand. That is up from 35 percent of today’s acreage.
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“Unless we come up with the proper price signals, that is going to encroach on the pulse acres,” she told those attending the conference.
Boersch said the wheat and coarse grains stocks-to-use ratio is the lowest she has ever seen it. The ratio, which hovered around 25 percent through the 1980s and 1990s, is now in the 15 percent range.
The other major theme emerging from the session was the instability in lentil and chickpea markets.
Commodity broker Larry Weber noted that lentil production has been all over the map during the past decade, ranging from a low of 354,000 tonnes in 2002-03 to a high of 1.28 million tonnes in 2005-06.
“This love-hate relationship with lentils is a nightmare,” he told producers.
“It’s a frickin’ roll of the dice every year and that has to stop.”
Weber said last year’s crop came in at 693,000 tonnes. Red lentils led the way with 306,000 tonnes of production, followed by large greens at 245,000 tonnes, small greens at 122,000 tonnes and 24,000 tonnes of other lentils.
He anticipates acreage will drop by 10-25 percent, depending on what happens with nitrogen prices before spring. Most of that drop will be in large greens.
Boersch also outlined the yo-yo nature of chickpeas, although she said that crop is in an upswing phase. She was optimistic about the market prospects for both kabuli and desi types in 2007-08.
Grower prices for desis have increased by almost $250 per tonne since June 2006. Kabuli values are up almost $100 per tonne over that same period.
She expects acreage for both types of chickpea to be up 15-20 percent in 2007.
“I don’t think that’s a problem on the marketing side at all this coming year,” Boersch added.
She said desi growers should keep an eye on the rabi crop in India, which has reportedly increased by 13 percent over last year.
“They have increased the acreage but I’m not convinced the growing conditions are that good,” said Boersch.
The outlook for peas is unlike the other two crops, said Rob Tisdale, special crops business risk manager for Agricore United.
“This comes up with a much more stable feeling,” he said.
Tisdale said Canadian pea plantings have hovered between 3.2 and 3.5 million acres over the past five years.
The key number for growers to look at heading into the 2007-08 season is the stocks-to-use ratio, which is at 15.9 percent, halfway between the extremes of 9.1 and 19.8 percent over the past five years.
Tisdale said the outlook for peas is good given the poor production in competing countries, an ongoing shortage of yellow pulses in India and a reasonable stocks-to-use ratio.
Some analysts are predicting that with the push toward more cereals and oilseeds, pea acreage will drop as much as 15 percent in 2007. Tisdale said with the recent run-up in nitrogen costs, he thinks it will be closer to a five percent drop, to 3.2 million acres.
“I can’t see anything in this outlook that would cause me to shift out of peas,” he said.
