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Trade News

Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.


Peas Fall From Favor as Canadian Farmers Swap to Planting Wheat

Wednesday, February 14, 2018 > 10:41:42


Just a few years ago it seemed like Canada’s farmers couldn’t get peas into the ground fast enough, but they’re now falling out of favor.

Pea plantings will probably decline to a seven-year low this spring, while lentil acreage drops by 27 percent, according to the nation’s agriculture ministry. Sowings will decline as farmers swap land for wheat and canola, the Canadian-made oilseed that’s used in everything from salad dressing to french fries.

It’s a classic crop boom and bust. Since 2014, pea and lentil acres surged across the country amid rising demand for the vegetarian staples and as farmers enjoyed record prices for the legumes. But that swell of production quickly led to a global glut and sent prices tumbling. Now countries such as India, the world’s biggest consumer, are imposing tariffs on imports to try to shore up markets for domestic suppliers. Regina, Saskatchewan-based AGT Food & Ingredients Inc., one of the top exporters of pulse crops, has slumped more than 40 percent in the past 12 months.

“It is challenging to put pulses in knowing that returns are not going to be as profitable,” said grower Morgan Nunweiler, who plans to slash his lentil acres in half and plant more wheat on his 3,000-acre farm hear Rosetown, Saskatchewan. “Looks like defaulting to cereals and canola is kind of what farmers in the area are doing.”

Falling Bids

Grower bids, a measure of cash prices, for some grades of large green lentils have tumbled 34 percent since November, and bids for red lentils were as low as 16.5 Canadian cents a pound in mid-February, according to data from Vancouver-based Stat Communications. By comparison, canola futures remained steady since Nov. 30, while benchmark wheat traded in Chicago climbed almost 10 percent.

As supplies grew, prices were further hurt amid declining export prospects. In December, India imposed a 30 percent duty on chickpea and lentil imports. The chickpea tax was increased to 40 percent this month. The country had bumper harvests and is trying to unload its surplus inventory.

“After India did what they did, it sort of shocks the market and shocks farmers a bit,” said Corey Loessin, board chairman of the Saskatchewan Pulse Growers.

Meanwhile, export demand for canola from countries such as China, Mexico and Japan remains strong, and additional oilseed acres will not result in a supply glut, according to Chuck Penner, the owner of LeftField Commodity Research in Winnipeg, Manitoba. Rising acres will send production of the oilseed to an all-time high, Agriculture and Agri-Food Canada said in a Jan. 25 report.

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