April Market Report
The Worldwide Commodity Market
The worldwide pandemic that began in 2020 has had a dramatic global impact on consumer buying patterns, and lifestyles. While this has forced a tough transition, with many sectors ripped apart by unemployment or lockdowns, the food industry has continued to plug along.
At Avena, we have had a wild ride on the commodity front, with strong pricing for barley, oats and peas and record high canola and flax prices. High prices are expected to continue for these crops, signaling farmers to seed these crops for next year.
Canola remains one of the Canadian prairie’s largest and best-selling crops. Flax bins are emptying out, with no carryout this year. The same scenario is playing out with barley. Feedlots are contracting new crop barley for north of $5.50 per bushel. That is higher than the maltsters typically pay, therefore they will have to step up and buy some acres.
Oat pricing is strong. Depending on the location, oat prices are close to $4.50 per bushel for new crop oats.
At $11.50 per bushel, yellow pea prices, have eclipsed green peas. This follows the pattern of yellow pea bids going higher than greens once every five or six years. Demand is up in part due to more processors fractionating peas but to a larger extent it has been a reduction in acres and last years new crop pricing did not entice the yellow pea acres. This has propped up the bottom of the pea market and moved the floor price above the norm of $6.00 per bushel, much like the petfood industry did a few years ago. The new norm for yellow peas may possibly shift to $8.00 a bushel.
Canola acres would be through the roof if growing conditions were optimal. However, the southern half of the province is dry this spring. Additionally, fertilizer and other input prices are also high, which may be reflected in canola seed sales.
If dry conditions continue in the south, we may see farmers electing to seed pulses (lentils, peas and chickpeas) and durum acres in their crop rotation, with less canola.
In the north half of the province, where spring soil moisture is not an issue, Canola, oats and barley could be the year’s winners. New crop yellow and green peas may hold some of those acres in rotation.
Weather conditions over the next five to six weeks will be crucial to decisions farmers will make on what to seed. It will be a horse race right down to the wire, with all of these crops jockeying for acres.
Do as your Momma says, “Eat your Peas!”
– from the desk of Mike Gallais
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