As we turn the calendar on 2018 pea prices and markets, it’s a time of reflection, but also one of planning. That being said, as a company, FarmLead is also reflecting on 2018 and planning for 2019 with some new products and tools! We’d love for you to have some input in the evolution of FarmLead (including some early access to try out some new tools) and so, before continuing your reading, please answer this 4-question survey. Thanks!
FarmLead’s 2018 Recap of Pea Prices, Markets
The 2018 calendar year saw pea prices start off pretty low as the market was still reeling from the impact of India implementing tariff import taxes on all pulses coming into the country. Technically, the first wave of import tariffs came into effect in November 2017, but the market took a few months before finding new lows.
As the 2018 North American growing season started out, the market seemed to find those lows. The rebound in pea prices seemed to be a bit stalled as the pea harvest was stalled by some negative weather. Further, Canadian peas exports has been relatively weak so far in the 2018/19 crop year, but have started to improve on news of a smaller crop in Australia and some poor moisture conditions in India. Thus, there’s a bit of a bullish buzz for pea prices as we flip the calendar from 2018 into 2019.
Bigger 2018 Pea Harvest in India
The biggest factor in pea prices in 2018 was without a doubt, India, and it was certainly negative. . Following the largest and second-largest harvest of pulses ever in India, the government implemented the market-changing import tariffs on all pulses as domestic prices started to fall.
Even as 2018 calendar year progressed, Indian prices of pulses have continued to falter, despite the Modi government has continued to drive the message home that they will support Indian farmers through the election in 2Q2019. 
As we flip the page to the 2018/19 crop year, the most recent estimate of the 2018/19 kharif crop of pulses in India was for 9.22 million metric tonnes (MMT). This is just above last year’s kharif crop of 8.9 million tonnes (as per the final estimate from the Indian government), but it is 29% more than the 5-year average of 7.15 MMT. This includes the record kharif crop harvest of 2016/17 of 9.53 MMT.
Something to consider is the current rabi crop that’s in the ground right now in India. It won’t be harvested for a few months but the crop is already dealing with less moisture than usual.
Specifically, the last week crop report of the calendar year says that an average of only 2.8 inches of rain has fallen across the country so far in the rabi crop growing season which started on October 1st. This is 43% below the average of nearly 5 inches of rain that supposed to fall over the 3-month period. If we look even further back to the monsoon period between June and September, total rainfall was 8% below the long-term average.
In major pulses production regions off Uttar and Madhya Pradesh, precipitation levels are about 80-90% below the seasonal averages. We should keep in mind though that reservoir levels in these areas are slightly above average this year, which would be slightly positive for crop production.
On that note, through the end of December, 34.76 million acres of all pulses have been seeded in India. This would be about 9.5% below last year’s acreage of 37.11 million acres by this time in the growing season. For perspective, the 2018 acreage of pulses in India planted thus far is about 3.5% larger than the 5-year average of 33.6 million acres planted by the end of December.
Specific to peas, 2.46 million acres have been planted in India this rabi crop growing season. This is actually 9.2% more than the 2.26 million acres planted by the same time last year and 4.7% more than the 2.35 million acres of peas usually planted by the end of December (5-year average)
Since peas in India are highly substitutable for chickpeas, it’s worth looking at chickpea production in the country in the same breath as field peas. As they’re known in India, chana acres planted so far in this rabi crop season has totaled 22.64 million acres. This is about 10.5% less than the 25.34 million acres planted by the same time last year but is about 3% more than the nearly 23 million acres of chickpeas usually planted by the end of December (5-year average).
On that note, pea prices and chickpea prices are both finding some strength on these acreage and moisture reports, albeit have leveled out more recently.
Aussie Pea Crop Falters, U.S. Rebounds (Technically)
As previously mentioned, 2017 was a record pulse crop in India.
The opposite happened in the U.S. as a drought challenged yields and thus production. In 2018, the U.S. peas crop rebounded (technically-speaking) after 2017’s drought-riddled harvest but not by much, with the harvest coming in at 629,310 MT. This figure is 2.1% lower than 2017 production of 643,060 MT and it would’ve likely been less of difference had acreage not declined so much. More specifically, U.S. pea harvested area dropped 22% year-over-year to 824,500. The biggest year-over-year drop was seen in Montana, which saw its harvested area drop by 150,000, or 32%, down to 320,000 acres.
2018 U.S. pea yields rebounded significantly though, up nearly 50% from 2017.
It was a similar acreage decline story in Australia where producers reconciled with poor pea prices by planting less peas. Total production came in at just 194,000 MT, down 33% year-over-year.
Correction for Canadian Pea Prices, Production
The peas crop in Canada was still relatively big in 2017 but it was slightly offset by a smaller pea harvest in the U.S. due to some drier growing conditions. All things being equal, we saw a bit of a correction of pea production in 2018 as individual countries started to review their acres, relative to pea prices versus other cropping options.
Specific to Canadian peas production, the most recent estimate from Statistics Canada put the 2018 harvest at 3.58 MMT, down nearly 13% year-over-year. 2018 pea yields were actually the same though as 2017 at 37.2 bushels per acre.
From a balance sheet standpoint, there’s a lot of peas available to start the 2018/19 crop year. This, combined with weaker forecasted Canadian pea exports, 2018/19 carryout will likely climb 15% year-over-year to 745,000 MT.
However, the optimism for 2.6 MMT has been dwindling a bit. Through Week 20 of the Canadian crop year, only 693,000 MT of peas have been shipped out of the country.
You can tell though that pea exports to China are becoming more important for the Canadian pea industry. In fact, according to recent commentary from Agriculture Canada, in 2018/19, Canada is expected to export a record amount of peas to the People’s Republic .
There’s also some buzz that there’s going to be more domestic demand as consumers are changing their eating habits, but in all honesty, this demand is quite small relative to the size of Chinese and Indian markets. 
Competitive Black Sea Pea Prices, Exports
One area that’s become more competitive in the pea production game has been the Black Sea. Between Ukraine, Kazakhstan, and especially Russia, Black Sea peas are have quickly become a nice alternative option for the likes of Chinese, but also India buyers. Something to keep in mind that the Black Sea pea harvest comes off a lot earlier than the North American or Australian harvest, so these buyers can pick first from these regions.
On that note, we looked at pea prices in the Black Sea in October, and even then, you could see that the recent years of bigger pea harvests are starting to show their true colours on pea prices.
Pea Prices Finding Year-End Highs
On that note, looking at today’s pea prices, values in Canada have started to rebound a bit. This is mainly attributed to the speculation of the slightly drier conditions in India as well as some seasonality in terms of Asian buying, namely China. All things considered, it’s nice to see that as 2018 comes to a close, pea prices have started to find some strength
As we head into 2019 though, there’s still a lot of peas left in Canada. However, the recent rally of pea prices has created some thinking that 2019 acres might be equal to 2018. We’ll dig more into that in our 2019 peas outlook found on our FarmLead Insights page.
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