Mike Jubinville can think of a few good reasons why farmers might not want to sell peas straight off the combine this year.
He expects a slow, steady climb in pea values during the 2006-07 marketing year due to strong demand from the Indian subcontinent and a tightening supply in Canada.
“There is nothing here to suggest that there’s a wild rally in the making here for peas. All I’m saying is we’re going towards a trend that’s going to start working its way higher,” said the Pro Farmer Canada market analyst.
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“For that reason I’m inclined to want to put peas in storage, if it’s of good quality, unpriced and wait this situation out.”
Statistics Canada releases its first official production forecast on Aug. 25 and if expectations hold true, exporters will be handling a much smaller pea crop than they had in 2005-06.
Processors attending last month’s Canadian Special Crops Association meeting said the crop was in trouble, with the heat shaving 15 to 20 percent off yields.
Saskatchewan Agriculture corroborated that finding with its estimate that pea yields will average 29.1 bushels per acre, which would be down significantly from last year’s 34.9 bu. crop.
That works out to a nationwide crop of 2.7 million tonnes and total stocks of 2.9 million tonnes, down 28 percent from last year’s burdensome supply of 3.7 million tonnes.
Jubinville said the smaller crop would support prices and perhaps lead to a rally this winter or next spring.
His optimistic outlook is fuelled by the fact that India and Pakistan have taken steps to restrict pulse exports and encourage imports, a sure sign that both countries are short of the food staple.
“That’s the key buying area for this product,” said Jubinville.
However, for the next three or four months, Canadian pea growers can expect stiff competition from their counterparts in the United States.
The meteoric rise in production in the U.S. had a considerable dampening effect on last year’s prices early in the marketing year when U.S. peas were flying out the door.
“We lost about 50 cents per bu. during the course of late summer-early fall,” said Jubinville.
“The market responded and started coming back after we got into November-forward and I anticipate that to be the case again this year.”
Excessive heat has reduced this year’s pea crop in North Dakota and Montana, but despite those agronomic difficulties, the U.S. Department of Agriculture believes production could exceed last year’s record due to a 12 percent increase in seeded acreage.
Another negative side effect of the U.S. pea boom is that the premium that once existed for quality green peas has been erased because the bulk of U.S. production is greens.
Farmers who are expecting a 50 cents to $1 per bu. perk for growing top-notch green peas are likely to be disappointed, said Jubinville.
“I don’t think that’s going to exist anymore. I think this world has changed.”
