People are starting to question whether pulse prices have already hit their seasonal highs.
Garth Patterson, executive director of Saskatchewan Pulse Growers, has spoken to exporters who point out that while growers may not be seeing record prices, international buyers are because of the strong Canadian dollar and rising ocean freight rates.
The feeling is that buyers can’t absorb more price hikes.
“There’s not a lot more upward pressure is what I’m hearing right now,” said Patterson.
Brian Clancey, with Stat Publishing, a special crops market information service, isn’t so sure about that.
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Twice this year he advised growers to sell their peas, once when the price hit $6 per bushel and once when it crested $7.50. But to his surprise, prices kept climbing, recently topping $8 per bu. for green peas.
That has Clancey reassessing his view of pulse market fundamentals. The situation is starting to remind him of the early days of the green lentil industry.
“Every year we said, ‘this is the year that prices collapse.’ And prices didn’t collapse.”
What market analysts failed to comprehend was the depth of demand for Canadian green lentils. Clancey wonders if the same thing is happening today with the entire pulse complex.
“Do we fully appreciate the demand that faces this industry?”
Strong sales to the Indian subcontinent have driven prices to where they are today. Clancey learned the hard way that it’s difficult to predict how long India and Pakistan will be in the market or how much they are willing to pay under these circumstances.
“I think it’s dangerous to presume anything about markets,” he said.
Other factors preventing him from jumping on board with the sentiment that the market may be turning are the situation of competing crops and the mindset of Canadian special crop growers.
If things continue as they are, strong grain and oilseed prices will undoubtedly take acreage away from special crops because wheat is easier to grow and market than peas, lentils, chickpeas or beans.
To some extent that acreage shift already started this year. While special crops held their own in North America, they retreated in Eastern Europe, a trend that could spread to important pulse production regions like India and Pakistan if strong grain and oilseed prices hold.
If that comes to pass, the special crops industry will have to buy back acreage by raising prices. On top of that, buyers will have to contend with a determined group of Canadian growers who know they are the leading exporters of peas, lentils, canaryseed and mustard.
Growers don’t care what is happening with ocean freight rates or the Canadian dollar because back on the farm, prices are a far cry from record levels for almost every special crop grown.
“We’re at records in the dealer trade but the grower isn’t seeing it,” said Clancey.
Oriental mustard has tied a record and other crops like red lentils and eight millimetre kabuli chickpeas are close. But Laird lentils, french green lentils, canaryseed and other crops have a long way to go.
Clancey said the grower is in the driver seat in some special crop markets and may be inclined to simply wait for better prices.
Despite his evolving view of pulse markets and despite being twice-burned, Clancey can’t escape that nagging feeling that at current prices of around $8 per bu., growers should plan on marketing their green peas this year.
“Why not take a good profit and use that to pay down debt?”
CGF Brokerage and Consulting is also advising customers to start selling green peas, although the Saskatoon firm believes there is still more upside with the crop.
In its Oct. 10 newsletter, CGF predicted mustard could reach 70 cents per pound and canaryseed 23 to 25 cents, based on reduced production estimates from Statistics Canada.
