GPC Ask the Experts North America/
Canada Dry Peas & Chickpeas

Analyst:
• Marlene Boersch, Mercantile Consulting Venture

Moderator:
• Carl Potts, Saskatchewan Pulse Growers

Panelist:
• Vishal Vijay, AGROCORP
• Torrey Lindsey,AGT Foods
• Greg Stamp, Stamp Seeds

At the GPC Ask the Experts North America: Canada Dry Peas & Chickpeas session, Carl Potts led panelists Marlene Boersch of Mercantile Venture, Greg Stamp of Stamp Seeds, Vishal Vijay of Agrcocrop and Torres Lindsay of AG in a discussion about this year’s unusual harvest. 

In her Canadian Peas presentation, Ms. Boersch discussed this year’s yields, numbers for which are estimated at between 23.9-32.5 bu/acre. Using the average of 26 bu/acre, the presentation showed yields down 36% from last year and 33% from the 5-year average. Although acres were barely down from the previous year, it is evident that production will be heavily reduced by the droughts, with numbers of 2.65 million MT, of which 86% will be yellows, 13% will be greens and 1% will be other varieties. Export availability is estimated at 2.3 million MT (of which 2 million MT yellows and 300 thousand MT greens) and ending stocks at 112 thousand MT.

Regarding exports, Boersch indicated that China bought 73% of yellow peas in the MY 20/21 and that it is likely that this year export reductions will occur to China, although around 500 thousand tons of pre-purchases were made. The US is expected to double its Canadian pea imports due to a poor harvest. It was also noted that domestic consumption is increasing and is expected to be a minimum of 835 thousand MT this year thanks to increasing fractionation and feed uses. Boersch mentioed that demand for Canadian peas has increased 205% in the past 20 years and although China is the biggest buyer, demand from countries such as Bangladesh, the US, UAE and the EU is climbing. Supply and demand is looking tight this year, with Mercantile estimating a 19% production decrease from last year. The issue of a lack of other viable importers for peas was raised as, although some Black Sea countries have been making sales, they will not have sufficient product to fill the Canadian and US gaps.

Mercantile’s data showed that prices have already reached the 2016 highs of $16/bu, bursting out of the price range of the past four years which was between $6 and $8/bu. Prices are expected to stay high for the next 2 years until stocks have been replenished somewhat. Boersch also commented on the growing plant-based protein market and the role of peas within it, underlining that this trend is expected to show huge growth over the next 5-10 years, significantly affecting both domestic and international demand. The presentation ended with Boersch indicating that, with the harvest over, growers are currently not feeling pressure to sell, due to a slight slide back in prices and reiterating that competition for acres is high, particularly when it comes to flax, canola, wheat and durum. 

Moving onto chickpeas, the yield estimates ranged from 780-920 lbs/acre and Mercantile was working with an estimate of 875, which is down 45% from last year and 42% from the 5-year average. Admittedly, acres were down 38% from last year, with a total of 186 thousand acres, and production is estimated at 74 thousand MT. Boersch cited price behaviour as her motivation for questioning StatsCan’s estimate of 285 thousand MT of carry-in, with Mercantile working from a more prudent 183 thousand MT. Total supply was thus estimated at 287 thousand MT, which is 61% of the previous year, with a maximum of 150 thousand MT available for export. Quality is expected to be generally good and sizes were 50-50 8mm and 9mm. Export demand from the US, whose crop is down 33%, is expected to be up as well as domestic use, as the market for pet food increases. Prices are expected to be strong with current grower bids of $57/cwt predicted to increase to up to $59/cwt, and could reach new highs deepening on the acreage outlook. 

During the discussion, panelists reacted to Ms. Boersch’s predictions, seeming to be mostly aligned. Quality was agreed to be fairly good across the board, mostly at grade 2. Mr. Vijay commented on the rumours of a possible allowal of Russian peas into China and the effect this could have on Canadian exports to China, namely a crash in prices and a drop in demand. However, he clarified his belief that this was not an urgent concern. Mr. Stamp touched on grower sentiment, saying that farmers would not be keen to do any forward contracts and that competition for acres was high as well as seed supply being incredibly low. Finally, panelists mentioned the challenges of growing chickpeas and expressed concern about the depleting acres caused by disappointing yields and competition from durum, oats and barley.