Pulse Market Report September 2014 : 2014/15 Pulse Crop Update

By Larry Weber

“There’s no such thing as a 100-year flood.” Andrew Cuomo, American politician When the rains finally stopped in 2010, much was written about the once in 100-year flood. The same term was used to describe the disaster in Alberta last year. Fast forward to 2014 and growers in southwest and south-central Saskatchewan have witnessed four of the last five years with abnormal rainfall – some with once in 100 year floods, three times in five years. The anomalous rainfall has put a dent in seeded acres and the full effect may not be known until harvest is completely over. Statistics Canada’s (StatsCan) first cut at production occurred August 21, with information derived from farm phone calls and internet surveys as from July 23 to August 4.

It is the end of August as I write this, with harvest just nicely started, so quality is going to be a major concern going forward as the rain that fell from August 23-25 was followed by three days of +28°C temperatures, causing major damage to quality and yield. The Saskatchewan Agriculture weekly crop report for August 25 indicated that only 8% of the lentils and 12% of peas were in the bin. That leaves a lot of questions unanswered. The primary question is not that of yield, but quality. If 2010 was any indicator, out of 235 lentil samples submitted to the Canadian Grain Commission (CGC) by November 22, only 38% of the green lentils were grading in the top two grades. Out of 221 red lentil samples submitted, only 22% were in the top two grades. For green peas, out of 81 samples, 36.7% were Canada No. 3 and sample. While it is still too early to understand the full quality impact, from the amount of sprouted pictures I’ve seen, quality will be a marketing concern for most farmers south of the No. 1 highway. Those lucky enough to harvest before the rains might want to hug their pulses a little more closely until the damage is fully known.

Another factor that reared its head over the summer was the amount of root rot found in peas and lentils in many areas of Saskatchewan. I expect that you will hear a lot about it over this winter. It may change rotations in many areas and acres could be challenged to maintain their current levels. From a marketing standpoint, these areas would not be included in StatsCan’s abandoned acres just yet (and there were some plow downs). The other residual from the disease is low yield and for the amount of times it was mentioned in Saskatchewan Agriculture’s weekly crop report, it will have an overall affect on total production. Disease pressure has been high in above average rainfall areas.

Peas: When StatsCan released the first pea production estimate, most traders were looking for a higher abandonment of acres than what was published, as seeded acres were lowered 50,000 from their last estimate. The totals from the August release included only the areas that were not seeded because of too wet conditions. The full brunt of the damage to the July and August flooding won’t be fully recognized until December. Pea production was estimated at 3.558 million (M) tonnes, down 7.6% from last year with 60% originating in Saskatchewan. StatsCan used an average yield in Saskatchewan of 33.8 bushels per acre (bu/ac). In the latest estimate from Sask Ag crop reporters, they estimated pea yield at 33 bu/ac. There were no updates on the split on green pea and yellow pea acres.

While India’s monsoon and kharif seeding started abnormally slow, pulse seeding was only 7% behind last year’s pace as of August 22. The next two weeks will be critical if seeding is to reach last year’s levels. As of August 27, the India Meteorological Department was indicating an 18% shortfall in monsoonal rain across the country. However, when you dig deeper into their best pulse producing areas, the deficit ranges from 6-58%. Compound their seeding and moisture woes with early frosts and a lack of moisture in Australia and the edible pea market will be well supported until the end of October. Don’t take that as a bullish indicator as we believe the upside on yellow peas is limited and won’t justify building new bins to store your newly harvested product. Green peas will be a different story if quality mirrors the 2010 harvest. Pea harvest has started in the United States (U.S.) and bids have been lowered there as harvest pressure develops.