The green pea market in Western Canada has reached a top after steadily increasing to record-high levels, industry officials said.
According to Prairie Ag Hotwire, green pea cash bids delivered to the elevator ranged from $13 to $14 per bushel as of Thursday (Dec. 6). This compares to month-ago prices of $11 to $13 per bushel.
Prices rallied to record highs as they were supported by this summer’s drought in the U.S., and production problems in South America, said Jackie Kress, a senior grain manager with Legumex Walker at Tisdale, Sask.
Prices have also been supported because there were very few carryover stocks from last year, Kress noted. But the market has probably found its top for now, because demand has started to drop off.
“I understand from our overseas counterparts that the demand has just dropped off because the levels have gotten too high,” she said.
Prices will also have to adjust lower as farmers are expected to plant more acres of peas in the spring of 2013 than they did in 2012.
According to Statistics Canada’s latest crop production report, farmers planted 3.3 million acres of peas in 2012, and 2.4 million in 2011.
But, even though prices are starting to come down from their highs, many farmers will continue to sell.
“Farmers have not stopped selling at these prices now that they’re starting to decline,” Kress said. “I think they’re wise enough in their own marketing knowledge to understand that we have probably hit the top for now.”
Though the green pea market in Western Canada has been fairly active and strong, the yellow pea situation has been much different.
“Price trends for yellow peas have remained fairly flat, as there doesn’t seem to be a tremendous amount of demand from our overseas markets,” Kress said. “Basically, we’re moving them as our typical markets buy them, but there isn’t a real hunger for them.”
— Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.