WINNIPEG – There’s a mixture of dread and excitement hanging over the pea market these days.
With an estimated 1.8 million acres of peas seeded on the Prairies this year, and near perfect growing conditions to date, the trade is bracing for a huge crop to market in the fall.
Traders are also trying to guess how a 40 percent increase in acreage will change the traditional marketing parameters for peas. The key question is how prices will adjust as the potential for an increase in supplies becomes a reality.
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It has prompted buyers, especially in the human consumption market, to hold back on new purchases. No one was bidding on old crop food peas offered in the $5 to $5.10 per bushel range early in the week, said Winnipeg special crops broker Ken Hooper.
“There are still peas out there that haven’t moved,” Hooper said. “When the market did that run-up in the early spring, growers seemed to think (prices) were going to the moon. They didn’t.”
And new crop bids are down nearly 70 cents a bushel, to the $4.40 to $4.50 per bushel range – not much higher than what good quality feed peas will now fetch.
It seems everyone is waiting to see whether Mother Nature is just teasing, or she’ll actually let farmers pull the crop off in good quality. “I sincerely believe there’s a chance, at least a chance, we could see a crop of one tonne per acre,” Hooper said.
The most likely result of such production would be a narrower and possibly non-existent spread between the price of peas headed for the soup pot and those that go into livestock rations.
“There may not be a significant difference between feed peas and food peas,” Hooper said. Buyers will simply buy peas and skim off the best quality for human consumption.
Kirk de Groot, director of special crops for XCAN Grain Pool Ltd., said as the pea market adjusts to more plentiful supplies, their quality will become more of a marketing tool than a pricing point.
That should help the trade expand the market base, improving the chances of moving the crop.
De Groot is optimistic the trade will be able to move at least 400,000 tonnes into feed pea exports with an additional 200,000 tonnes used as feed domestically. He estimates as much as 200,000 tonnes could go into the human consumption market.
But while demand is good, “I’d be surprised if we got rid of all of it.”
