Canada’s dried pea 2021/22 production is forecast to fall sharply amid adverse weather

The 2021/22 season has not been the most favorable for Canadian dried pea farmers. According to November’s crop outlook by Agriculture and Agri-Food Canada’s (AAFC), the total production of dried common peas in the country is forecast to drop to 2.53 million tonnes in 2021/22, 45% less than in 2020/21. The dried yellow peas output is projected at 2 million tonnes, or 46% lower, whereas the green pea production is projected to decrease by half to 0.4 million tonnes. With such low numbers, the total common pea production in Canada has dropped to its lowest level since 2011/12.

Source: Agriculture and Agri-Food Canada

A fall in production is primarily linked to the severe drought that rolled out in the main producing areas of the country in summer. The phenomenon had been preceded by very low soil moisture during seeding in Western Canada, which accounts for 99% of the total country’s crop. This worsened the development of the crop. As the summer was progressing, the farmers did not see any relief. The worst situation was observed in Saskatchewan, which accounts for 52% of total Canada’s pea output. As the crop progress report of the mentioned province showed, as of 2 August 2021, only 3% of the soil areas were reported as adequate, whereas 31% and 66% of the soils were reported as low and very low respectively. The consequences of the dryness were reflected in lower figures in the pea crop forecast reports. In the August crop progress, AAFC lowered its common pea national output to 2.65 million tonnes. Later in November, the forecast was revised again and was cut to 2.53 million tonnes.

Source: Agriculture and Agri-Food Canada

In addition to the weather factor, dried pea production in Canada has been also limited by the reduction of the sowing area under this legume to 1.55 million hectares in 2021/22 in comparison to 1.72 million hectares in the previous season. Regardless of firm demand and high crop profitability, Canadian farmers have opted for sowing even more lucrative crops, like canola and soybeans. This is one of the main reasons for the fluctuation in the acreage of legumes and pulses, as farmers always estimate the market conjuncture by looking at adjacent crop markets.

Exports down, prices up

A drop in Canada’s dried pea supply has been immediately reflected in export figures. The first two months of the 2021/22 season saw a drastic plummeting of the commodity shipments overseas. From August through September, the exports of dried peas from Canada totaled 608,000 tonnes, 32% less year on year. In August, the decrease was not so noticeable, because the country was still partially replying to the old-crop exports. However, in September, the peak month of new-harvest shipments, the foreign trade of dried pea sales contracted by 35% year on year to 493,000 tonnes. The same can be said of the total exports of dried yellow and green peas from Canada in the current season which are forecast to deteriorate to 2.3 million tonnes versus 3.58 million tonnes in the previous season and 3.71 million tonnes in 2019/20.

Source: ITC Trade map

As a result of the supply shortage caused by drought in the local market and strong external demand for Canadian dried peas (especially from China and Bangladesh), new-crop wholesale and export prices have soared since July 2021. Canadian domestic bids for dried yellow peas have jumped by 64% over the past five months. However, prices have not reached their peak yet. AAFC expects domestic prices for the dried yellow pea to rise to historical CAD600/MT (USD477/MT) this season.

Source: Providence Grain Solutions, APK Inform

As Canada is the world’s biggest exporter of dried peas, its high prices have dragged the bids to the top in the Black Sea Region, the other main exporting region. Domestic and export prices for dried field peas have grown both in Ukraine and Russia, although the harvest of peas has increased in both countries by 19% and 8% accordingly. For example, Ukraine’s export bids for dried field peas spiked from $240/MT in early July to $340/MT in early December.

Sources:

Agriculture and Agri-Food CanadaCanada: Outlook for Principal Field Crops, 2021-11-19Agriculture and Agri-Food CanadaPrincipal field crop areas, June 2021

Agriculture and Agri-Food CanadaCanadian Drought Monitor
Saskatchewan Official Web SiteCrop Report For The Period Of July 27 To August 2, 2021
Agriculture and Agri-FoodCanadaOutlook for Principal Field Crops, 2021-05-20