A lot of things have been bad in 2020, but there have been a few good things. Durum and pulses prices fall in the good column.
Poor prices in 2018 led to a drop in durum acreage last year, said Geoff Backman, manager of business development and markets for Alberta Wheat and Alberta Barley. Italy’s country-of-origin labelling was a big factor with exports to that country (which had been buying up to a million tonnes of Canadian durum annually) falling to a third of that level in 2017-18.
“Farmers are business people,” he said. “There was a good amount of durum acres and lower-than-expected exports. It just resulted in durum prices dropping.
“Farmers responded accordingly and took a million acres into something else in 2019. We’ve been on a recovery ever since.”
But those who stuck with durum or returned to it this year have been rewarded.
According to Price and Data Quotes (PDQ), durum prices were $250 a tonne last year in southern Alberta but are up this year.
“Prices just came off a recent high here of $300 a tonne,” said Backman. “They are now around $275.”
There is strong demand coming from Turkey, Morocco and Italy compared to last year.
“Morocco and Italy are markets that are normally very good customers,” he said. “Italy has still not recovered from country-of-origin labelling, but we’re starting to see some stronger exports there. That could indicate it is having problems with its domestic crop.”
The big surprise has been Turkey, which as of June had bought nearly one million tonnes of Canadian durum, only slightly behind Italy and ahead of Morocco. That country has been buying more because it has taken in more than 3.5 million Syrian refugees and is also supplying Syria.
There are only about five million to six million acres of durum grown in Canada, with about one million acres grown in Alberta, mainly in the south. Backman said he wouldn’t be surprised if growers plant more durum next year.
“If prices go up, farmers are going to take market signals and they’re going to grow what the market wants,” he said.
Although durum is a small-acreage crop in Alberta, Taber-area producer Jason Saunders kept it in his rotation (along with wheat, canola, pulses, and winter wheat).
Last year’s drop in durum acres was a bit of a blip, he said.
“As much as durum prices went down, spring wheat prices went up,” said Saunders. “That’s what really happened. That pushed durum acres down for 2019. Spring wheat prices rallied and that put a lot of pressure on durum. This year’s acres are closer to normal. Last year, the acres were down dramatically.”
Durum has a longer growing season than spring wheat, and is much more susceptible to disease pressure. And because the export market is so small, prices can see big swings.
“Prices will likely soften as the markets react to the extra supply, because production is up a little bit per acre, because we had a little better rainfall this year,” said Saunders.
Lentils have been another bonus for him this year. The province’s lentil area, which is generally in the south, is expected to produce a good crop.
“Lentils will come under pressure, not because of supply, but because of demand,” he said. “India has not got as good of a crop this year, and so the demand is a little higher this year out of this country.”
Like durum, lentils generally need a longer season and do well in a drier climate.
“They are crops that have paid off for us because we can get quality,” said Saunders. “That’s the reason we grow as much lentils and durum down here as we do. Traditionally, we’re drier and that helps with quality.”
The pulse market is up around the world because pulses are a major protein source for so many nations, said Leanne Fischbuch, executive director of the Alberta Pulse Growers Commission.
“Buyers around the globe were looking to bring product from Canada into their countries.”
Prices started picking up in mid-February before the pandemic hit and pushed demand higher.
“Other parts of the world look to Canada to be a supplier of high-quality products, that started to be reflected in the prices, and the demand started creeping up,” she said.
Fischbuch doesn’t have official numbers, but she said that her board members and representatives have said they have noticed a slight increase in pulses being planted in the province.
India has reduced the tariff on imported lentils and has declared that Canada won’t have to meet a controversial fumigation requirement before Dec. 31. Pulses are also an important part of food aid, which is currently being delivered to many countries affected by COVID-19.