After a lengthy hiatus, green pea growers are again getting a premium for their product.
Greens used to fetch about a $1 per bushel premium over yellows, but for the past three years prices for both commodities have moved in tandem.
That trend remained through spring and even early summer when prices for both commodities started falling from highs of more than $11 per bu.
By late summer a gap appeared as yellow pea prices fell faster than greens. That gap has widened to about a $2 per bu. premium for green peas.
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The explanation for a return to green pea premiums is straightforward.
“There has been an exodus out of greens into yellows because they are less risky to grow,” said Tony Gaudet, president of Belle Pulses Ltd., a pulse processing and exporting firm headquartered in St. Isidore-de Bellevue, Sask.
Stat Publishing estimates green pea production at 498,700 tonnes, down 100,000 tonnes from two years ago. Yellow pea production is pegged at more than three million tonnes, up nearly 900,000 tonnes in that same period.
Gaudet has no clue how long the premium will remain but green pea movement has been “slow but sure” into India, South America, Europe and North Africa.
Fewer seeded acres in France and poor crops in the United Kingdom and the United States are helping to keep Canadian product flowing.
By contrast, yellow pea movement has been extremely sluggish.
“I haven’t seen it like this since 1989,” said Gaudet.
He didn’t have a price for greens last week but if he did it would have been around $7 per bu., well above the long-term average. His yellow pea bids worked back to $5 delivered, near the long-term average.
With Agriculture Canada now forecasting 900,000 tonnes of pea carryout, Gaudet is bearish on where yellow pea prices are heading.
“I’m scared that we’re going to see the same prices that we saw a year and a half ago – $3.75 to $4.”
Dwayne Moore, a pulse grower from Rosetown, Sask., is relieved he delivered his yellow peas straight off the combine.
“We sold the peas at $8.10. I was actually thinking they were going up and I was mad at myself for selling them.”
One of the landlords he deals with didn’t have enough bin space for the peas and Moore didn’t like the idea of piling the crop on the ground.
“It wasn’t good marketing strategy. It was plain luck,” he said.
Moore runs a tax return business and most of his clients around Rosetown who grew yellow peas say they’re sitting on them, waiting for better prices. But the bills are mounting.
“At some point farmers are going to need money,” he said.
In the meantime, processors and exporters are fighting with buyers over product that has already been shipped. Buyers are walking away from pea shipments or demanding huge discounts on deals made when prices were much higher.
“It’s a mess out there. All over the world it’s a mess,” said Gaudet.
Processors and exporters are unable to go back to growers to negotiate a lower price on product that has already moved through the system.
“We’re stuck. We’re the ones that have to take it on the chin all the time from both ends,” he said.
Farmers that Moore has spoken to are all talking about cutting back their pea plantings.
“With the fertilizer prices dropping and the pea prices dropping they’re telling me, unless they change their mind, they’re not going to put as many pea acres in,” said Moore.
