Pea traders are baffled by Statistics Canada’s seeding intentions report.
“I’ve never seen the thinking so diverse between Stats Canada and the industry,” said a pea merchant at one of Canada’s largest pulse firms, who requested anonymity.
“Not to say that they’re not right because who knows? The grower this year is about as flexible in his thinking that I’ve ever seen.”
Statistics Canada’s March survey of 16,800 farmers revealed they intend to seed a record 3.6 million acres of peas, up 2.3 percent from last year’s record crop.
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That is a far cry from the four million acres the trade expects, said the pea trader. It is also less than half the five percent increase forecast by Saskatchewan Agriculture in its first crop report of the year.
Given soaring fertilizer costs and continued strong pea demand from India, pulse industry executives believe acreage will likely rise more than the government’s modest projection of 80,000 acres.
Spring prices for 46-0-0 urea fertilizer are 44 percent higher than they were two years ago, which bodes well for a nitrogen-fixing crop like peas.
Better yet, the pulse demand out of India that led to near record yellow pea prices shows no signs of abating as the government there attempts to quell inflationary pressures by boosting its food supplies.
India’s Cabinet Committee on Economic Affairs recently approved the import of 1.5 million tonnes of pulses through public sector agencies over the next six to eight months.
Those purchases would qualify for a 15 percent government subsidy and would include 750,000 tonnes of yellow peas.
Those are a few of the reasons why Canadian pea traders continued offering $7.25 per bushel for yellow peas last week, choosing to ignore what they considered a conservative forecast from Statistics Canada.
“Just a 2 1/2 percent increase over last year doesn’t seem to make sense considering the mood and the values,” said the pea merchant.
“Holy mackerel, if I was a pea grower, I’d be piling peas in.”
Forward markets are sold to the limits of the trade’s logistical capabilities and he suspects growers will be maxing out acreage to the point they will be forced to use poor quality seed.
But if he is wrong and the Statistics Canada forecast proves correct, Canada will have the lowest supply of peas it has had in four years, despite the record acreage, due to low carryout levels from the busy 2006-07 season.
That has some analysts speculating the domestic livestock industry will have a tough time sourcing feed peas, aside from the percentage of the crop deemed unusable for human consumption.
The source said it is too early to draw those kinds of conclusions. That will be determined by what kind of growing season lies ahead.
“If there’s no quality, there is nothing but feed and it’s rock and roll time for the feed boys,” he said.
One thing he does anticipate is that specialty cleaners and processors will be keenly interested in nailing down green pea supplies through production contracts because no matter the size of the coming pea crop, it will contain a higher percentage of yellows than ever before.
