Last year was a low point for pulse crops in Alberta.
After record-high pulse acres in 2016, global markets slipped a little in 2017, and farmers got nervous. Fewer pulses went in the ground that year. Then top customer India all but closed its doors to Canadian pulses by imposing steep tariffs, and acres dropped even further in 2018.
But this year is a different story.
“This year is a nice turnaround for pulses,” said Alberta Pulse Growers chair Don Shepert. “We’re seeing more acres, and it’s a much more positive outlook.”
He credits that reversal in fortunes to developing markets in Asia — particularly China, which took 1.77 million tonnes of yellow peas last year (75 per cent of yellow pea exports).
“You have to thank China for that — it opened up a much larger import market for us, and we managed to double our exports to China last year,” said Shepert, who farms near St. Paul. “That basically cleared out a lot of the excess yellow peas.”
And while demand in China grew thanks to increased pulse fractionation, pulse production in Australia and the Baltic Sea region dropped as a result of drought. So China bought what it could from Canada.
“It’s really helped to bail us out in a lot of ways. We now have manageable inventories so that the outlook is a little bit better,” said Shepert. “I think people feel a lot more positive now about the decision they made in the spring to seed more pulses.”
‘Not quite as scared’
But the past two years offered a reality check, he added.
“I’m really positive about the future of our pulses, but when something like India happens, it stops you in your tracks,” he said. “This was probably the hardest spring to put numbers to acres before seeding. I knew if I expanded my pea acres, that’s a big risk, but I couldn’t really expand my canola acres because in the fall, we could be sitting on it.
“We’re getting more tools every year to expand our production, but you have to temper that with our access to markets.”
Breeding efforts over the past decade have resulted in varieties that stand and yield better, but now prices are the concern.
“People are still price sensitive when it comes to making their crop plans,” said Shepert. “You’re either going to make good money on some of your pulses or you’re going to break even, and breaking even isn’t a great outlook for some people.
“So they choose not to grow them until such a time as that can be guaranteed.”
This year, pulse acreage increased to 2.3 million acres (versus 2.1 million a year ago), according to StatsCan estimates.
“The amount of peas grown in 2018 might have been a bit of an indication that farmers were a little bit scared, but this year, pulse acreage is up 20 per cent in Alberta,” said provincial pulse research scientist Robyne Bowness Davidson.
“I’d say they’re not quite as scared as we thought they were.”
That’s partly because prices have been better than expected, said Shepert.
“Despite the tariffs, India has whittled away at our lentil stocks and our green pea stocks,” he said.
“Green peas last year were up to $14 a bushel, so there were a lot of green peas that went in this spring. It’s a small market, but when you see those kind of prices, you’ve got to react.”
And while prices have dropped off in recent months, they haven’t fallen as much as anticipated, and are now on the rise.
“We were really worried about prices being really poor, and they did drop down to about $6 a bushel, which is a lot lower than farmers would like to see,” said Bowness Davidson.
“But we thought they were going to go lower than that. So the fact that they went down to $6 and then bounced back close to $7 has definitely had an impact. Prices are slowly starting to climb again.”
Red lentils inventories are down, so “the future looks a little better for them too,” said Shepert. “There’s talk of higher prices for red lentils as we proceed into the new year.”
After record high lentil acreage in 2016, India’s tariffs “almost destroyed the crop in Saskatchewan and Alberta,” he said.
“There were over four million acres three or four years ago, and now we’re down under two million acres (across the Prairies),” he said. “That’s a big hit to take in acreage, and it’s affected a lot of farms in southern Saskatchewan.”
Even so, many producers in the drier parts of the province have kept lentils in their rotation despite the price.
“The farmers who had success with red lentils when the price was really good have incorporated them into their rotations and they’re keeping them in. So the lentil acreage is staying higher than we originally thought,” said Bowness Davidson.
Fababean acres “exploded” to about 100,000 acres in 2015, but after two dry years, acreage has dropped to a quarter of that this year.
“Fababeans do not like dry weather at all, and with the dry couple of years we’ve had, some producers have tried fababeans and been very unhappy,” said Bowness Davidson, adding competition from the Baltic Sea region has hurt, too.
“They’re way closer to Egypt than we are, so that’s impacted the human consumption market,” she said. “It’s been a market issue, as well as an agronomic issue, with fababeans.”
But soybeans are a potential bright spot on the horizon.
“We’re on the cusp of seeing a lot of soybean acres come into central and northern Alberta,” said Shepert. “We just need a couple of early varieties that grow well.”
Soybeans are where peas were 25 years ago, he said. Back then, producers thought the crop would only grow south of Edmonton, but today, peas are well established across the province.
“It takes awhile — it takes some persistence and some mettle to decide you’re going to make a new crop work,” he said. “People don’t see it yet, but that will happen with soybeans. They’ll be a much more stable part of our rotation in the future.”
But Bowness Davidson is a lot more cautious.
“It has the potential to be a crop we can look at in the future, but at the moment, I don’t think soybeans are an overall good choice for the majority of Alberta,” she said, adding few areas have the conditions the crop needs to thrive.
“If it gets below 20° — and if it goes below 10° at night — they’re just not going to perform well at all,” said Bowness Davidson.
Soybeans also require a lot of moisture, and in Alberta, “you tend to get one or the other.”
“You either get a lot of heat in a dry, warm season but not as much moisture, or you have a cold, wet summer, where you get lots of rain but you don’t get the heat,” she said. “It’s a tricky combination to get successful soybeans.”
And while some Alberta producers are successfully growing soybeans, the yields aren’t generally great.
“They’re barely breaking even at this point, and in general, I’d say we’re still losing money on soybeans in Alberta,” said Bowness Davidson.
“There’s a lot of breeding. There’s a lot of interest. It’s a big topic of conversation. But at this point, we’re not there yet. I think we need at least five more years — at least.”
But pulse proteins are a different story.
“In Western Canada, we’re already known as a pulse crop powerhouse,” she said. “We’re growing a lot of them across the Prairies. So the opportunity for us to capitalize on this is potentially huge.”
“Everybody is out there looking for new markets and new places to sell our pulses, but the most exciting one is the domestic market,” he said. “Right now, if we were to lose China, we would be sitting on a lot of pulses again and wondering what to do. We saw that with India a few years, and now there’s reduced acres in lentils.
“So (domestic processing) will help quite a bit in dealing with some of our excesses in some years.”
The demand for plant-based proteins has jumped over the past two years and Ottawa is pumping $150 million into plant protein “supercluster” to spur development of domestic pulse processing. A new $400-million pea-processing plant being built by French company Roquette will open in Manitoba next year, another $65-million pea- and canola protein-processing facility in the province was recently announced, and Verdient Foods (partly owned by Hollywood superstar director James Cameron) opened in Saskatchewan last year.
But it’s too soon to say what kind of impact all this might have here.
“We don’t know exactly where we’re going to be going with this, but there’s an incredible amount of interest and an incredible amount of money being put into seeing if we can capitalize on this,” said Bowness Davidson.
It will take time, but boosting domestic demand is good for the sector, said Shepert.
As these new pulse plants come online, he’s hopeful Alberta pulse acres will increase.
“We still don’t know the impacts of having domestic fractionation running, but as farmers, we react to price, and we react to being able to sell our product,” said Shepert.
“With domestic processing, there’s still the potential to expand back to those pre-tariff days for acres. And that would be an awesome thing.”