Pulse crop prices jump in Canada, even as supply grows

Farmers who grow peas and lentils are expecting a lucrative year as overseas demand grows.

Farmers boost production to capitalize on drought in India

Canada exports pulses to countries such as Turkey, Egypt, China and Bangladesh, but the biggest market is India. (Wikimedia/Creative Commons)

The little-known pulse industry in Canada is enjoying a financial boost as crop prices rise to record levels this year.

Some farmers are choosing to grow more peas and lentils in hopes of a lucrative year as overseas demand grows.

"There have been prices this high before, but it was when the industry was very small," said Jean Harrington, who operates a 3,000-hectare farm near Glenside, Sask. "This industry has grown exponentially over the last 10 years."

Farmers are reacting to the price jump by choosing to plant more pulses instead of cereal crops. For instance, the amount of dry peas planted is forecast to increase by 14 per cent in 2016, while lentil plantings will grow by 13 per cent, according to Agriculture Canada. 

Twelve months ago, yellow peas were selling for about $7.50 a bushel and have since shot up to between $12.75 and $14. Red lentils were about 27 cents a pound, but are now trading between 45 and 57 cents.

"These are very high prices for a product now that is essentially a commodity, not just a niche market," said Harrington.

Prices on store shelves could also climb, but it likely won't lead to sticker shock for most people. Canada exports the vast majority of pulses grown in the country.

"In fairness, most of us don't buy enough pulses that we even look at the price," said Harrington. "The majority of the price escalation is because of overseas." 

Pulses include peas, chickpeas, beans and lentils.

The pulse industry has operated in relative obscurity in Canada for many decades, but the popularity of the food is growing. The sector has experienced rapid growth in production in several provinces.

Pulses are also a trendy item, according to many food writers, considering they are flexible and easy to use. Compared to meat, pulses are a relatively inexpensive source of protein. 

The United Nations declared 2016 the international year of pulses to "heighten public awareness of the nutritional benefits of pulses as part of sustainable food production aimed towards food security and nutrition."

Low loonie

Canadian prices are benefiting from the low loonie, since most pulses are traded in American dollars. 

Canada exports pulses to countries such as Turkey, Egypt, China and Bangladesh, but the biggest market is India, which is experiencing its second straight drought year.

"Everybody's watching the weather in India. They are by far the largest importer of lentils this year," said Mike Davey, a market analyst with Manitoba-based FarmLink Marketing Solutions. "India is a strong importer for the balance of this year and then again next year as well."

Canadian production of pulses and special crops, such as peas, lentils, chickpeas and beans, rose from about one million tonnes in the early 1990s to 5.7 million tonnes in 2014.

The majority of Canada's peas, lentils and chickpeas are grown in Saskatchewan. The province exported $2.5 billion worth of lentils in 2015.


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