No one was surprised by the big boost to pulse acres in the recent StatsCan seeding intentions report, at least for a couple of crops. All of the bullish market talk and historically high bids for both old-crop and new-crop pulses were enough to trigger a strong response by farmers. Now, the big question for marketers is whether those acres are too high, still too low or just enough to meet next year’s demand.
For peas, the StatsCan survey revealed farmers would be adding 16% more acres to last year’s seeded area. This means 4.3 million acres of peas would be planted, a new record. Even though StatsCan doesn’t break down acreage by type in this report, we expect most (or all) of that increase occurred in yellow peas because of the unusually strong prices. That means it’s possible green pea acreage could be flat or actually decline.
Even though a 16% increase in seeded area seems like a lot, this year’s acres aren’t that far out of line with other big years. And as important as acreage is, yields are just as critical in determining supplies, so there’s still a lot of uncertainty. That’s especially the case with concerns about dry conditions in Alberta.
Of course, the other side of the coin is the demand situation and it’s clear India will need more peas for at least the first half of 2016/17, if not longer. Its own crop was disappointing and more imports will be needed. The only fly in the ointment is that pea acreage in competing exporters such as the US, Russia and Ukraine is also expanding to meet Indian demand. The bottom line is that there’s potential for global pea supplies to overproduce for India’s needs, but that would need at least average yields.
The boost in lentil seeded area was even larger than peas with a 30% increase, and that’s on top of last year’s record. The 5.1 million acres will spread across more of the prairies, including areas that aren’t ideally suited for lentils and that raises some production risks. We expect red lentils will account for a larger portion of the increase, although aggressive bids for green lentils will have encouraged more acres too.
Over the past five years, lentil yields have ranged from 1,330 up to 1,850 pounds per acre and that adds a lot of uncertainty to the supply outlook. Based on the seeded area, those two yield extremes mean a possible production swing of 1.2 million tonnes, potentially a huge difference. With average yields, production would still be a million tonnes higher than last year.
If production rises that much, it also means consumption needs to increase too. Keep in mind though that very few lentils will be carried over from the current year into 2016/17, which will help offset the bigger crop. Indian lentil imports (especially reds) are expected to expand and should use up a large part of the increase, but possibly not all of it. That leaves some risk of heavier supplies in 2016/17 if yields are at least average.
StatsCan showed a drop in chickpea acreage although historically, StatsCan often makes big revisions for chickpeas in later reports. Limited seed supplies and competition from lentil acres have been suggested as reasons for fewer chickpeas. Crops of large calibre kabulis in other key countries are expected to decline and push global demand higher. This could make large calibre chickpeas a winning proposition in 2016/17.
Dry bean acres are also forecast to decline, although the StatsCan data tends to be patchy at best. Canadian markets are dominated by what’s happening south of the border and US acres are also forecast to drop. This could provide some decent support for several bean classes next year.