Prairie farmers have grown record pea crops in six of the past 10 years. But this year, the magnitude of the record has some people wondering where the supplies will go.
Technically, there are enough peas for two years’ worth of demand, said Brian Clancey, analyst with Stat Publishing Ltd. in Vancouver.
Given what exporters and domestic feeders have been able to use in the past, he estimates about 1.3 million tonnes will be used, about half of what was produced this summer.
Prices are reflecting the large supply. Feed pea bids for growers are around $3 per bushel, while peas for human consumption are fetching $3.25 to $3.75 per bu., with premiums for special varieties.
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Farmers who had good yields can probably break even at these prices, he said. But he noted many growers are holding their peas, waiting for better prices.
It’s a strategy that has some merit, he said.
“I really don’t think that grower prices are going to go down a whole lot from here,” he said. “They probably have more upside than downside potential now, despite the (record) crop.”
According to Agriculture Canada, the average price for peas on the Prairies was $177 per tonne last year. This year, government analysts anticipate average prices between $110 and $140 per tonne.
Low prices are maximizing export opportunities, said Clancey. “One guy I talked to today (Oct. 16) said, ‘People are moaning a lot about low prices, but I have never sold more merchandise.’ “
Prairie processors are booked through November, which Clancey deems positive.
“It really means that the low prices are doing their job, which is attracting demand and moving the maximum quantity of merchandise that we can.”
Some export opportunities have been created by a gap in supply created by a late pea harvest in India, which is behind by 20-25 days. India alone consumes more than one million tonnes of pulses per month, most of which are home-grown.
But the opportunity might pass Canada by.
“With Canada’s ultra-high-efficiency grain handling and transportation system, 25-day windows are too narrow,” Clancey said, tongue firmly in cheek.
Allan Johnston, a broker at Welwyn, Sask., said he’s been “extremely” busy filling orders for exporters, particularly of edible yellow peas.
But he doesn’t see much potential for prices to go up, with the Asian financial crisis and expected large crops in Australia, Europe and the United States.
“The price of peas is still ugly-low … but I’m still recommending guys to sell it and get going because I’m fearful that we might not see a heck of a lot through the winter, (in terms of) improvement or movement.”
But if peas get a good break into the local feed market this year, the outlook could be brighter, said Clancey, adding there are some indications of increased feed use in Alberta.
Kenneth Lopetinsky, a pulse and special crops specialist with Alberta Agriculture at Barrhead, said it’s too early to tell how many peas will be fed in the province this year.
Feed pea quality is excellent because of the dry harvest, he said.
And because growers were finished harvest in early September, they’ve had more time to look at marketing their feed peas locally, Lopetinsky said.
“Maybe that’s going to be helpful in maybe seeking out some new markets and making a better effort in marketing locally, in that there isn’t an easy big (export) sale going somewhere right now.”
