One of the new entrants on the pulse scene expects more plant closures
and financial chaos this year.
Anthony Kulbacki, president of Blue Hills Processors Ltd., said there
will likely be some amalgamations and consolidations as a result of the
second consecutive year of poor pulse production.
“I also see that there may be some existing players exiting the
business and that’s on the export side and the processing side, quite
frankly.”
He said the industry needs to move toward some sort of price protection
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mechanism to safeguard such companies. Kulbacki and 74 other investors
from Avonlea, Sask., also foresee the need for the industry to move to
larger processing plants, like the one they are building in the town 80
kilometres southwest of Regina.
Blue Hills is a large $5 million processing plant under construction.
Once completed, it will have the ability to clean, bag, size and load
140,000 tonnes of pulses a year.
The plant has 6,210 tonnes of raw product storage, 2,350 tonnes of bulk
storage capacity for clean product and 700 tonnes of bagged storage.
It will operate two cleaning lines – one for lentils, the other for
field peas and chickpeas. The lentil line is capable of processing 800
bushels per hour, the pea line 3,000 bu. per hour.
Situated on a CN branch line operated by Southern Rails Co-operative
Ltd., the plant will have two rail sidings and will be able to spot 50
rail cars.
Kulbacki said that is the future of the pulse industry.
“There’s a bit of an evolution from these on-farm cleaners, smaller
plants, to these higher throughput facilities that have good rail
spots. It’s almost like the evolution from the wooden grain elevators
to the larger concrete elevators.”
The Blue Hills plant was built for volume and flexibility. But its
ability to handle bagged or bulk product and to take advantage of rail
discounts for multi-car lots will keep the plant competitive,
especially when moving field peas, said Kulbacki.
“If you don’t have a 50-car spot, you’re going to have a very tough
time playing in that market any more.”
He said the plant will be acting as a processor for line companies and
other exporters, but he worries about the ability of those companies to
deal with a second straight year of small crops and rising prices.
“Price volatility and the lack of any effective hedging mechanism are
the single biggest issues facing the industry today. It is difficult
for any exporters to maintain a consistent export program without
taking on an onerous price risk.”
Kulbacki said exporters may lock in price and quality levels with
buyers earlier in the year, but come harvest they could have a tough
time attaining those levels. That is especially so in a year like this
when Statistics Canada is forecasting a western Canadian pea and lentil
crop that is 31 percent smaller than last year’s.
