Last week, FarmLink met with farmers across Alberta to answer their questions about the markets – answers you may find valuable too. Today, Alyssa Mistelbacher, FarmLink’s Lead Pulse Analyst, will turn her attention to two popular questions:
Q1: Should green peas be planted over yellow peas?
Farmers are interested in growing green peas in 2020/21, due to high prices in 2019/20 – a result of a tight supply and demand balance. However green peas are a small market with only incremental demand growth. Even modest increases in seeded area leave the market very susceptible to oversupply.
FarmLink estimates a +13% jump in green pea seeded area. Assuming an average yield, green pea production would jump +20%, and stocks would move to burdensome levels. Further, green peas, compared to yellow peas, have a higher cost of production and a substantially greater quality risk. If you are growing green peas, it’s critical to put them on a contract (with an AOG) sooner than later.
The yellow pea market faces challenges as well. We lost a key buyer (India) in 2019/20, and there is no sign they’ll be back in 2020/21. India’s domestic crops look promising and there are no foreseen changes to Indian government policy in the near-term. China is a vital player in the yellow pea market this marketing season, for both food fractionation and animal feed use. The country is expected to import a record 2.2 MMT of peas. However, it’s not a given that China will be back in 2020/21 with the same voracity. Increased 2020/21 feed grain crops globally may dampen yellow pea food usage in China.
Bottom-line: Only plant greens if you are an experienced grower. That does not mean go into yellow peas. On a year-to-year standpoint, farmers are advised to decrease acres planted to yellow peas.
Q2: What are your thoughts on Fababeans?
The 2019/20 marketing year has seen strong values. Export grade fababeans are trading above $9.00/bu, and feed quality is approaching $6.75/bu. These lofty prices are expected to entice increased acres in 2020/21. FarmLink is estimating 80,000 acres of fababeans in Western Canada, up +17% year-over-year, but still below the record planting levels in 2017/18.
Major growing regions like the United Kingdom, Baltic countries, and Australia will also increase production in 2020/21. Canada is a very small player in the global fababean trade, making it difficult to compete. Canada is seen as a last resort for Egyptian buyers. Remember, Egypt is the only major buyer for fababeans globally. Given the likelihood of increased world production in 2020/21, prices of export quality fabas are likely to fade back to the $7-$8/bu range this coming season.