MONTREAL, Que. – It is fitting that at a time when the special crops industry is trying to capitalize on its contribution to the environment, the price outlook for green peas is particularly bullish.
Brokers, processors, traders and analysts speaking at the markets outlook session at the Canadian Special Crops Association annual meeting anticipate upward pressure on prices after harvest for all pulses with green peas leading the charge.
Lawrence Yakielashek, general manager of Toepfer Canada, said crop supply will be extremely tight this year.
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“We cannot afford any losses of greens,” he told delegates.
Yakielashek believes yields will average 32 bushels per acre, down from a 14-year average of 37 bu. because of the lateness of the crop and production problems in northern Saskatchewan.
That would result in 3.23 million tonnes of peas, of which an estimated 455,000 tonnes would be green, barely enough to service demand.
In the past two years most of the crop has been of the edible quality because of good harvest conditions.
But this year 47 percent of the crop is two weeks behind normal development and another 10 percent is three weeks behind, while 15 percent is under drought stress.
“We’ve got a late crop,” said Yakielashek.
Any losses due to frost and the premiums for food grade greens will “skyrocket” to $4 or $5 per bu. over yellows.
“There is no doubt about it, it’s a very, very tender situation we have right now.”
Growers will need near perfect conditions for the remainder of the growing season to generate the 2.7 million tonnes of yellows the market requires. If 30 percent of the crop is downgraded, it will create a 10 to 20 percent price bump over today’s values. If 40 percent is downgraded, growers can expect a 30 to 40 percent increase.
Greg Kostal, analyst with Kostal Ag Consulting, thinks there is enough demand to support a price of $10 per bu. for yellow peas and $12 to $13 for greens.
Martin Chidwick, senior vice-president of Bissma Pacific, said lentil crops are also eight to 15 days behind normal. He believes a trade forecast for an 828,000 tonne crop is overly optimistic.
For the first time in a long time, green lentil supplies around the globe are tight and that is happening at a time when Canadian growers scaled back green lentil plantings.
“We anticipate prices to be firmer this fall. Firmer than they already are,” he said.
Red lentil area jumped a lot in 2008 to 740,000 acres from 470,000 acres in 2007, but the market is supported by strong demand prospects.
A speaker from Turkey said his country will produce less than 100,000 tonnes of lentils this year, down from 580,000 tonnes in 2007.
“2008 will be one of the most difficult years for the Turkish pulse sector,” said Orhan Sirt, who owns a brokerage firm in Turkey.
The country regularly consumes 300,000 tonnes of lentils and exports excess production.
“Turkey will be a good buyer of Canada’s,” he said.
Kostal said red lentil prices will likely stay high through the 2008-09 crop year.
“I think we’re going to see north of 40 (cents per pound). There’s a debate whether we’ll see 50.”
He thinks 40 cents is a “very workable number” for large greens, and small greens at 35 to 40 cents would make sense.
Growers planted an estimated 180,000 acres of chickpeas this year, the smallest area since 2004. Kostal expects upward pressure on kabuli and desi prices, although there is barely any desi acreage.
Derwin Hodgins, department manager of crop inputs and origination at the Hensall District Co-operative, said Ontario’s bean crop is small and may lose yield with late seeding because of excess spring moisture.
Canadian dry bean area is estimated at 309,100 acres, down 12.6 percent from last year. Production of the three major classes of beans, navy, pinto and black, is expected to fall by 8.6, 27.8 and 20.8 percent respectively.
That is an optimistic forecast given the strong potential for frost damage in Ontario.
“Everybody is nervous about supply,” said Hodgins.
