NorthStar News

How Did the Pea and Lentil Crop Do This Year?

By: John Dietz

Politely, and particularly, the profit potential in 2016 has pushed seeded acres of peas and lentils to all-time records in Saskatchewan in 2016.

And, according to the Saskatchewan Pulse Growers (SPG) association executive director, Carl Potts, the outlook for these pulses next year is also pretty firm, pretty good.

Saskatchewan planted 7,165,000 acres of lentils and peas.

Specifically, seeded acres of lentils soared to 4,855,000 acres, according to the StatCan report for June. That compares to 3.7 million acres last year and 2.46 million acres in 2011.

Seeded acres of dry peas rose to 2.31 million acres in 2016. That was a slight increase over last year, but really in line with dry pea plantings since 2012.

By comparison, soybeans were “on hold” in terms of their Saskatchewan presence – at about 250,000 acres.

Potts said, “Strong prices for both lentils and peas are pulling acres up. Lentils now exceed pea acres. In Western Canada, we’re expecting acres of peas to be up about 16 percent to 4.3 million acres this year, and lentils to be up about 9 percent to 5.14 million acres.”

Potential net return per acre for the two pulses, he says, can be as much as double the return for wheat or canola crops produced in 2016.

The two pulse crops normally are seeded in late April and May.

“Conditions were very good this year,” Potts said. “We had an early start for seeding overall, without a lot of moisture or dryness. We had a lot of dry weather during seeding. Then following seeding, we had a number of rains. It was quite conducive to getting the crop in and started.”

As of June 20, the crop condition report from SaskAg was looking good for the province, overall. Nearly everywhere, Saskatchewan crops had good growing conditions with adequate moisture.

“We had a little early season pest pressure. Always, with peas and lentils, if you get a little too much moisture there can be challenges with root disease. Some areas of the south were bordering on having too much moisture in early June, but some warm dry weather came along at the right time,” Potts said.

Market-driven

Weather, elsewhere, has been behind the strong market-driven prices for Canada’s pulse growers.

“Demand out of south Asia and India, in particular, has driven a lot of import demand for Canadian peas and lentils, resulting in production increases here in Canada,” Potts said. “They have rising population and rising incomes. That means more and more pulses are consumed each year. And when they have a production challenge, it means they need to import more pulse crops.”

India relies on Monsoon rains, mainly in June, to produce both the summer crop and the winter crop. Lentils and dry peas are staple foods for the 1.3-billion-person Indian economy.

“If their Monsoon is weak, often their crop yields will be lower. India has had two successive weaker than average monsoons, so their domestic pulse production has been lower,” he said.

Simply, farmers in Canada, the United States, Australia, and elsewhere have responded to those market signals by putting in more pulse crops to fill that rising demand.

In addition to India, growers have significant export markets for red lentils in Turkey, Bangladesh, Egypt, and Sri Lanka. The international green pea trade is smaller and more diverse. For yellow peas, India, China, and Bangladesh are the primary importers.

Price Signals

Strong price signals for an increase in 2016 acres began in December 2015 and are still strong as summer begins.

The fact that these commodities are priced and traded internationally in U.S. dollars is also an incentive to Canadian pulse growers. The Canadian dollar was trading at a long-term low this past winter, boosting the value of U.S.-dollar payments by 30 percent or more.

Potts said, “Growers are seeing, since about December, very strong prices for new crop contracts. That really is what pulled in the additional acres in the ground this May.

“We had record high prices for lentils. Over a good portion of the marketing year, lentil prices were largely 50 to 70 cents a pound (Canadian). That is much higher than they normally are. Red lentil prices, particularly, have been very strong.”

On June 20, there is still firm price support for red lentils, green lentils, and yellow peas.

“Those new crop pulse prices are expected to remain fairly firm until we get much closer to the Canadian crop harvest because old crop supplies are virtually sold out,” he added.

“Even with expectations that Canada will produce a much larger crop, we expect prices to remain firm for the remainder of 2016.”

The price outlook for dry peas and lentils in 2017 will shape up once India takes off its summer crop.

The outlook now (June 20) is that India will have an “above normal” monsoon season. The four-month season, June-September, is predicted to have about 10 percent more rain than normal.

“We could see the prices soften a little. That’s the general expectation, but that’s if everything goes as normal. Those expectations could change if there are production problems in India, in Canada, or in any other major exporting nation,” Potts said.

“Other areas of the world are responding by producing more lentils and peas. There could be some softening of prices, but global demand does remain very strong for these crops. That’s why the outlook is so positive in all this.”

Along with the role of weather in the choices that growers make for planting, Potts notes that they also have better technology and more flexibility than even five years ago. So, it’s easier to switch acres to a pulse crop.

One change is the availability of high-yielding red lentils with Clearfield technology. One of the first was CDC Maxim, released in 2007.

“It’s one of the most widely produced red lentil varieties in Western Canada. Now, with the amount of acres we’ve seeded, it’s probably the leading red lentil variety in the world,” Potts said.

“With the Clearfield herbicide resistance technology in the seed, growers are finding weed control easier and more effective. They’re also able to fit these lentils into their rotations more easily, and are able to control weeds in the crop better than ever before.”