Saskatchewan farm journalist Kevin Hursh, moderator of the pea market outlook panel at the Saskatchewan Pulse Growers’ meeting at Crop Week, put panelists on the spot asking for their pea price predictions for 2010.
Greg Kostal, president of Kostal Ag Consulting in Winnipeg, says “sometime in the next 12 months the price will run to $7 per bushel.” Then he added, “I’d be a seller in the $6 to $7 range, and I’d use $6 in my budget spreadsheets.”
Daniel Holman, grain merchant with North West Terminal in Unity, Sask., says he’d budget $6.50.
Peter Wilson, manager of the global supply chain with Australian company JK International, was more bearish. “Peas will beat wheat in terms of gross margin,” he says, but he put the price outlook at $5.25 to $6.25.
In his presentation, Kostal says that if pea prices don’t move up in the next three months, then pea acres in Western Canada will likely drop in 2010.
Holman raised the issue of increased pea subsidies in France, which could reverse a long decline in French pea production. Up to 2009 the subsidy was out to around C$33 per acre, but France has a new subsidy equivalent to C$115 per acre for feed-protein crops, including peas.
Most of the talk in this panel revolved around the Indian market. Canadian pulse exporters rely heavily on the Indian market. Wilson, as an Australian, observes that India is the big importer and Canada is the big exporter, and we need each other. That makes India the market to watch. Strong government involvement in the pulse trade in India could also be a cause for nervousness in Canada.
“India will act in its own best interests,” Wilson said, then added, “India can play funny buggers, but it still needs peas.” Exporters have to be on their game to deal with what may from India, he said.
Jay Whetter is editor of Grainews.