Fierce price competition likely to suppress pulse acres

Pulse acres will drop in 2022 despite sky-high fertilizer costs, according to one of Canada’s leading analysts.

Stat Publishing is forecasting 4.06 million acres of lentils, a six percent decline from this year and 3.74 million acres of peas, down two percent.

Stat editor Brian Clancey can’t justify penciling in an increase in plantings of either crop given the prices of competing crops.

“Look at canola right now. Today you can get over $1,000 per tonne for canola. I think that’s unprecedented,” he said.

“Explain to me why someone would not want to seed canola.”

It is a similar story for oats and durum. There are a limited number of arable acres in Western Canada and if farmers increase plantings of those crops they have to reduce acreage of others.

Rather than planting more pulses to cut back on fertilizer costs he thinks farmers may use the reserve nitrogen in fields that were seeded to pulses last year to grow canola and other high value crops.

Stat believes red lentil area will fall to 2.37 million acres from 3.17 million this year, while green lentil acres may rise to 1.37 million acres from 1.12 million.

Red lentils have not been performing well with prices well below green lentil levels.

Yellow pea area is expected to drop ever-so-slightly to 3.2 million acres from 3.23 million, while green pea plantings could decline to 484,300 acres from 515,700.

Clancey said green peas have not been moving well because Canada is an island of high prices compared to the rest of the world.

Canada is still shut out of the Indian market and the Chinese feed pea market appears to have disappeared as well.

“Why not grow crops where you know where the demand is?” he said.

Chickpeas is the one pulse crop where he is anticipating a sizable increase in acres to 233,000 acres from 185,500.

He expects farmers to respond favourably to strong prices and movement for that crop due to a huge shortfall in the United States.

“They’re actually performing quite well,” he said.

Fellow analyst Marlene Boersch is not quite ready to stick her neck out on a 2022 pulse acreage estimate.

“I’m not so conclusive yet on next year because there are two opposing streams of thought,” said the managing partner of Mercantile Consulting Venture.

On the one hand, there is the belief that acres will be up due to record high fertilizer prices. Many macronutrients have more than doubled in price from year-ago levels.

But she agrees with Clancey that pea and lentil old crop prices are not as attractive as competing crops such as canola, durum, flax and oats.

Boersch makes her acreage estimates based on projected returns per acre for the various crops but that calculation is difficult to make this year because there are precious few new crop bids for pulses.

“Viterra has a 25 cent new crop red lentil price and I would say that does not (stand out) compared to some of the other prices we’ve seen,” she said.

“There is an ability to forward price some interesting prices on the major crops but to a much lesser extent on pulses.”

Chuck Penner, analyst with LeftField Commodity Research, was one of the first to offer up an acreage projection that was published by Alberta Pulse Growers on Oct. 29.

He believes high fertilizer prices combined with the ability of pulses to perform better under dry conditions will tip the balance in favour of pulses.

Penner is forecasting 4.6 million acres of lentils and 4.1 million of peas, both a seven percent increase over this year.

He said the pea acreage would be a recovery from this year’s lower plantings, while the lentil number would be the largest in several years but still nearly one million acres below the record of 2016.

“It’s more about replenishing supplies,” he said in the article he wrote for Alberta Pulse Growers.

He anticipates 250,000 acres of chickpeas, a sizable bounce back from last year’s depressed acres, while bean plantings may drop to 400,000 acres from 426,000 this year.