The spread between Western Canadian green and yellow peas is close to $6.00 per bushel, as a $2.00 per bushel rally seen by green peas since the beginning of October has prices at levels that many producers didn’t see coming.
“Green peas continue to climb and we’re seeing a 12 in front of those prices now,” he said. “The theory (for the rally in prices) that some have is that there were industry shorts that needed to be covered off,” said Shawn Madsen, operations manager for Southland Pulse in Estevan, Sask.
“I have no idea if this is going to last or not. Generally, the overall feeling is that prices are not going much higher than this.”
According to Prairie Ag Hotwire, FOB farm green peas were selling for as high as $12.00 per bushel on Oct. 24, which compares to $6.75 per bushel for the yellow variety.
“The yellow peas are still sub $7.00 (per bushel),” Madsen said. “What a difference. I don’t know if we’ve ever seen such a spread. Nobody can really explain it. Yellow peas aren’t significantly down; it’s green peas that are significantly up.”
He noted that the current market for the green variety is very favourable for growers across the Prairies despite the large crop.
“We’ve shipped out a lot of green peas,” Madsen said. “Growers produced a lot, yes, but we’ve also shipped more than probably an average year at this point.”
“The price for green peas is strong, movement is great, and I think it’s a very profitable commodity for them right now,” he added.
Statistics Canada has dry pea production for 2013/14 pegged at 3.781 million tonnes, which would make it the largest crop in the last ten years.
With the price for greens being as high as it is, there is some speculation that traders may look towards Argentina for cheaper peas, Madsen said.
“I was told this morning by a trader that Argentina will be starting to offer sales next week,” he said. “It sounds like that trader’s focus will be away from Canada’s $12.00 peas and shifted over to Argentina’s cheaper peas.”