Not that long ago, the U.S. pulse industry could barely muster a heartbeat. These days it is thumping along at a healthy clip.
For the first time in history, American pea, lentil and chickpea growers are expected to crest the one million acre threshold.
Stat Publishing estimates U.S. farmers will seed 1.1 million acres of the three crops in 2005, almost double the 560,000 acres grown in 2001, the year before pulses were incorporated into federal subsidy programs.
That exponential growth rate has elevated the country from minor threat to major competitor status in certain pulse markets.
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“We are very much aware that U.S. farm policy has been the culprit for seeing significant increase in production down there and that is having an impact on our situation here in Canada,” said Francois Catellier, executive director of the Canadian Special Crops Association.
Pulse Canada program manager Greg Cherewyk said the mounting threat from south of the border will be discussed when the board of the industry association meets later this year to plan a new multi-year operational strategy.
It is becoming a hot topic, with members of the trade requesting Pulse Canada look into U.S. marketing activities in some key export destinations.
In particular, the soaring pea acreage has Canadian pulses racing.
American growers are expected to plant 640,000 acres of peas in 2005, including 136,000 acres of yellow peas that will be shipped to destinations such as Cuba and China, which have been the traditional domain of Canadian exporters.
“This is a concern to some of these companies of course, because with the subsidies in place, the Americans can offer a cheaper price into some of those markets,” said Cherewyk.
They can also offer consistency of supply. With an established floor price for peas, American exporters don’t face the same challenges as their Canadian counterparts in a year like this when growers don’t want to deliver peas into low value markets.
Marketing is another key competitive concern.
The U.S.A. Dry Pea and Lentil Council receives considerable support from the United States Department of Agriculture and other marketing programs.
The Americans have been successful in branding their product. Canada doesn’t have the same kind of “horsepower” or marketing dollars to match that effort.
“Spain is held up as a prime example of an area where we have lost a bit of (lentil) market share because of their ability to get in the buyers’ faces,” said Cherewyk.
It isn’t the only example.
Cherewyk just returned from a trip to Bangkok, Thailand, where he was surprised to come across a U.S.A. Dry Pea and Lentil office, especially considering the council already has a presence in Shanghai, China.
“There’s hardly any product going into Southeast Asia so the fact they have an office there is a little unusual,” he said.
Discoveries like that lead him to believe the Americans are pulling out all the stops to find a home for their increased pulse production.
“The only way to do that is to take market share away from Canada because the markets aren’t expanding.”
Developing a long-term generic response to that looming threat is a tricky prospect, said Cherewyk, because little can be done to combat lower prices and consistency in supply made possible by U.S. farm policy.
It is more likely that responses will be crafted on a case-by-case basis, with Pulse Canada being more able to respond to marketing issues than subsidy-related matters.
