In the past 10 years, field peas have become an increasingly more important crop for western Canadian farmers.
In 1994, farmers across the Prairies seeded 1.76 million acres of both food and feed peas; the record acreage yielded record production of 1.44 million tonnes. Sask-atchewan accounted for 1.11 million of those acres alone.
Estimates released last week by the statistics branch of Saskat-chewan Agriculture forecast pro-vincial pea acreage will climb yet again this year, by eight percent to 1.2 million acres.
In the past 10 years, Saskat-chewan field peas have averaged 365,000 acres.
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If sheer volume is any indicator, field peas have eclipsed oats and certainly rye in farmers’ hierarchy of crops and will likely equal flax.
Yet flax, oats and rye are traded at Winnipeg Commodity Exchange. So why not peas?
On April 26, the WCE’s board of governors will consider a proposal to launch a futures contract in feed peas.
It’s an idea that been floated for a number of years, said Ray Cooper, a farmer from Laporte, Sask., who sits on the Saskatchewan Pulse Crop Development Board.
He said a futures contract for feed peas would give farmers a chance to lock in a price for their crop.
Cooper said the WCE will need to be prepared to show farmers how to use the contract if it becomes reality.
There are other logistics to iron out as well, Cooper added, among them delivery points and standardized grades.
But farmers won’t be the only ones using the possible contract. Cal Kelly, a farmer and market analyst in Regina, said feed pea processors and end users including hog farmers are other likely clients.
In fact, in order for the contract to have any integrity, Kelly said there needs to be a fluid market with lots of buyers and sellers.
That’s a bit worrisome for peas, he admits. Although supply is less of a problem, it still is a fairly-thinly traded crop with just one main buyer – the European Union.
But Kelly added one of the biggest problem with the pea market is farmers have to rely on their buyers for a price. A futures contract would be an independent source of price discovery, he said.
For those who want to hedge, it would provide that opportunity.
But for those more comfortable in the cash market, Kelly said a futures contract would allow them to accurately track the local basis and use it to make marketing decisions.
