Chickpeas: They’re More Than Just Hummus

Recently we began our insight of the 2017-18 chickpeas markets as part of our broader overview of the pulse market (See the link at the end of this article.)

Our focus at the time centered on factors surrounding both the Indian market and Canadian producers. Given that India is the world’s largest producer and consumer in the chickpeas space, their name is bound to come up.

But in the U.S., it’s hard to get too many people on the floor at the Chicago Board of Trade chatting about chickpeas. In fact, they’re more likely to sit around the local Chicago taverns snacking on hummus, and not even know that chickpeas are the primary ingredient.

Americans typically refer to them as garbanzo beans or “garbanzos”.

The truth is that chickpeas remain an important cash crop here in the United States and for our neighbor to the north.

Today, let’s chop up some data and prove that chickpeas are more than just an appetizer.

They’re a critical crop in the global agricultural economy.

Here’s more to help you understand what’s on tap for the 2017-18 chickpeas markets.

A Little Background

Chickpeas are primarily consumed as part of Indian, Mediterranean and Middle Eastern cuisine. You’ll find them in hummus, and curries, and falafels. And while demand is high in those other countries, U.S. demand is on the rise.

According to the Agricultural Marketing Resource Center, the average American will eat about 1.85 pounds of chickpeas in 2017. That’s more than a 50% jump from last year, when per-capita demand was 1.21 pounds per capita in America [1]

We typically focus on two types of chickpeas. The most common light-colored chickpeas are called Kabuli.

In the U.S., agribusiness firms typically market kabuli as canned chickpeas for salads and other dishes.

The other variation is smaller, darker chickpeas commonly known as “desi.” In the U.S., these chickpeas are usually sold dry and used as flour for a variety of baked goods.

According to Bloomberg, North American researchers and companies are working on new products to fit the health-and-wellness category.

For example, Canadian food scientists are working on pea flour varieties that can be used to manufacture bread that tastes like wheat varieties.

Campbell Soup has produced a firm called Bolthouse Farms that makes alternative milks from pea protein. Meanwhile, agribusiness giant General Mills uses chickpea protein in a variety of snack bars.

Mind blown yet?

These new product lines are in response to consumer trends. Vegan diets are the fastest growing trend on restaurant menus in the United States.

According to Technomic’s 2016 Healthy Eating Consumer Trend Report, vegan options increased by 71% between the start of 2015 and end of 2016.

During the fourth quarter of 2016, Technomic notes that mentions of chickpeas on menus increased by 3.8% year-over-year. Hummus mentions gained 3.7% year-over-year. [2]  

The proof is in the utilization numbers.

In the past 10 years, domestic demand for chickpeas in the US has gone from less than 47,000 tonnes to nearly 200,000. The biggest jump was between 2015 and 2016 when demand doubled to nearly 184,000 metric tonnes.

And where there is a sharp rise in demand and utilization, there is naturally a corresponding uptick in supply and production.

2017-18 Chickpeas Markets: U.S. Production on the Rise 

In 2017, the most recent estimate pegs US acreage at a record 604,000 acres. This is nearly 86% more than the 325,300 planted in 2016.

Kabuli chickpeas continue to account for more American acreage. In 2017, about 70% of all chickpea acreage are going to into the large chickpea type. Further, total American kabuli chickpea

The breakdown between desis and Kabulis has stayed consistent over the past few two years though with 35% being desis and 65% being Kabulis.

However, because of drought conditions in the Northern Plains, US yields are expected to be down by nearly 20% from last year. Considering the massive jump in acreage, 2017/18 American chickpeas production should still hit 371,000 tonnes.

That’s a 50% jump from the 2016/17 crop.

In the U.S., production primarily takes place in the Northwestern portion of the United States. Production can be demanding as they require drained soil to enhance higher yields.

chickpeas-us-canada-farmlead
More US chickpeas again in 2018, less in Canada?

 

They also require regular aeration to ensure high quality while in storage and require regular testing to protect against spoilage.

The state of Washington usually takes home the title of the highest level of U.S. production.

In 2017 however, Montana was expected to take the top title.

Across the border in Canada, chickpeas acreage declined by nearly 16% in 2017 to 135,000 acres. The height of Saskatchewan acres planted to chickpeas was in 2001. That year, 1.1 million acres were seeded!

Given that U.S. demand (and global demand as well) keeps rising, it would make sense for North American producers to take advantage of the ongoing trend of healthier dieting in the U.S. and uptick in cultural cuisine demand.

Production Can’t Keep Up to Consumption

While U.S. production has certainly surged the past few years, imports have increased as well to keep up with domestic demand.

In 2016/17, over 58,000 MT of chickpeas were imported into America. That was up 27% from the year prior.

Mexico is usually the number one supplier, but Canada took that title last year with 41% of imports. This, despite some late season rains that affected quality. 

It looks like US chickpeas imports will again increase in 2017/18. Thus far in the current marketing year, imports are tracking 34% ahead where they were a year ago.

Exports, however, are a different animal. We can see quite an increase over the last few years.

In 2014/15, America exported just 89,300 metric tonnes of garbanzos.

The following year — 2015/16 — imports grew by 34% to 119,400 tonnes

In 2016/17, it grew yet again, but by 111% to 252,320 tonnes.

Thus far in the 2017/18 marketing year, exports are tracking about 6% ahead of where we were a year ago.

Spain is usually the number one destination for U.S. chickpeas, averaging almost a quarter of all exports over the past four years. Pakistan, Canada, India, and Turkey round out the Top 5 destinations for American chickpeas.

Global 2017-18 Chickpeas Markets

With that in mind, the United States comes nowhere close to the world’s largest producer of chickpea crop.

That title easily belongs to India.

Right now, we’re entering the Rabi (winter) seeding season in India. November is far and away the most important month for pulses in India. 54% of all Rabi acres are planted in November, with another 26% getting seeded in December.

Desi chickpeas and red lentils tend to own a lot of Rabi crop acres. However, because of some difficulties selling to the government this year – and lower prices in general – Indian pulses acreage will likely decline to 21.2 million.

As a result, total chickpea production in India is expected to come in at 7.8 million tonnes. That’s a 14% drop from last year’s record crop of 9.08 million tonnes of chickpeas in India.

Demand for kabuli chickpeas has been growing though, in India and abroad. You see this reflected not only in America, but in India and Mexico as well.

Australia, Pakistan, and Turkey all jockey for top chickpeas producers, but remain a far cry from the total output of the world’s second most populous nation.

Also, worth mentioning is the rise of the Black Sea in pulses, namely Russia. So far in 2017, it’s estimated that Russia has exported almost 232,000 tonnes of chickpeas. [3]

Most of the Russian production is going to Turkey.

Ultimately, the short-term outlook for chickpeas prices remains strong in both Canada and the U.S. However, once the Indian and Mexican crop potential is more understood, we could see some pressure on markets.

That in mind, do you oppose selling at record prices?

Post some of your chickpeas or garbanzos on the FarmLead Marketplace to secure a price that you likely won’t see a year from now.  

After doing that, be sure to check out our expectations for the broader pulse crop markets heading into the new year.

For more on where I see chickpea prices heading (along with the rest of the pulse market, read more, right here.

About the Author
Brennan Turner

Brennan Turner is the CEO of FarmLead.com, North America’s Grain Marketplace. He holds a degree in economics from Yale University and spent time on Wall Street in commodity trade and analysis before starting FarmLead. In 2017, Brennan was named to Fast Company’s List of Most Creative People in Business and, in 2018, a Henry Crown Fellow. He is originally from Foam Lake, Saskatchewan where his family started farming the land nearly 100 years ago (and still do to this day!). Brennan's unique grain markets analysis can be found in everything from small-town print newspapers to large media outlets such as Bloomberg and Reuters.

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