Roger Vickers, Chief Executive of PGRO, comments that the market in the UK is dominated by the fact that the national pulse crop is down significantly on the year and the bean crop has significant visual quality issues.
The murky supply picture is becoming clearer and the apparent shortage of product has driven the recent increases in bean prices. Falling International yellow pea prices may put a cap on these rises as buyers are offered alternatives.
UK Peas have also yielded less than average, and values are starting to rise further on the back of availability. The 2018 harvest has generally produced better quality and rewards will be reaped.
Significant concern about winter bean seed availability has resulted in derogation for the sale of lower quality seed being issued. Minimum germination has been reduced from 80% to 70%. The quality of spring bean seed is not yet known. Growers hoping to farm save seed are urged to have it tested for germination and vigour.
The potential impact of 2018 crop quality on seed availability is causing the market to speculate about supply from 2019 too.
The 2019 pulse crop is receiving interest from growers struggling with oilseed rape establishment issues.
Demand continues to be well supported in all sectors of the UK pulse market and values have risen accordingly.
Franek Smith, President of BEPA, reports that previously, the total bean crop was estimated at approximately 500,000 tonnes but as the trade develops it is now thought that this may be as much as 100-150,000 tonnes over cooked once seed saving and on farm fed quantities are accounted for.
Quality has been significantly impacted and with bruchid damage, physical shattering of over-dry grains and reduced grain size, the impact on cosmetic appearance and seed quality has been enormous.
The feed bean market tracked wheat futures upwards pre-harvest but as wheat stopped rising, the speculation about bean availability continued to drive prices onward. Early exports, domestic commitments for feed and a reduced quality specification by human consumption buyers are supporting the values which are as high as £212/t ex-farm.
At these values, aquaculture may start to seek alternatives in the form of imported peas, available at a discount to beans of £8-£10/t. Other feed users may also switch which will slow bean demand.
For human consumption beans, the Egyptian market represents an annual opportunity for approximately 700,000 tonnes beans. Realising that if they stuck to their normal specification, buyers would not be importing from the UK in 2019, relaxation of standards has taken place.
Beans are now being taken for export with as much as 20% Bruchid damage. The cost of this is in the price. Top quality beans can command as much as £265/t ex-farm. Where up to 20% damage is seen deductions down to £230/t ex-farm or lower can be expected.
It is anticipated with crop 2018 beans in short supply from all markets and values rising dramatically, Egyptian buyers will in part switch to Russian chickpeas and lentils which are currently available at lower cost.
Most of the current combining pea crop is already grown on contract so movements are proceeding without significant drama. Generally, crop 2018 has produced good quality, which is in part compensating growers for lower yields.
The lower yield has accelerated the balancing of supply and demand and this is reflected an increase in 2019 crop contract values.
Demand for marrowfat peas is good and open market values for good quality peas are currently around £275-£300/t ex-farm depending upon location and colour quality.
New crop contracts are available for crop 2019 with values at around £350/t ex-farm before any deductions for quality issues - and with bonus options, that could bring as much as £380/t. These levels are starting to attract increasing interest in crop 2019.
Typically, deductions start at 10% bleaching with around £3/t for every 1% bleached over 10% to a maximum of 30% bleaching. At 30% and beyond the prices are generally out of contract.
As always, to secure the best prices growers need to remain focussed on quality with this crop.
The market for large blue peas has been relatively quiet to date but is now starting to move with values for open market blues up to £255-£260/t ex. This is highly dependant upon quality (colour, size, cooking and soaking ability) and lower quality might yield £220/t ex-farm or less.
New crop 2019 contracts have been revised upwards slightly and are available based on quality criteria being met and a min/max value of £225-£275/t ex-farm.
Yellow peas are most affected by the world trade in peas and therefore international price fluctuations. There is a limited domestic market and yellows are receiving little trade interest at present. Offers might be received at around £205/t ex-farm.
The Canadian Principal Field Crops report advised in September that 2017-18 yellow pea exports were 22% lower due to lower shipments to India, and whilst partly offset by exports to China and the US, domestic use fell too. Stocks increased and average prices fell.
For 2018-19, dry pea production in Canada is estimated to fall a further 12% from 2017-18 as harvest area declines. However, total supply is forecast to fall by only 3% due to stockholding. Exports are forecast to decrease to 2.9 Mt. The average price is expected to be lower than 2017-18.
The USDA forecast the area seeded to dry peas to fall 22% from 2017-18, to 0.9 million acres. Assuming normal abandonment and yields, dry pea production is forecast by AAFC to rise to 0.7 Mt. The US has been successful in exporting small amounts of dry peas to markets in China and Turkey.
In a nutshell, North American pea production is competing for reduced export markets with the ongoing restrictions to the Indian market. Stocks are rising and, as a result, depressing yellow pea prices in international markets.
The Baltic bean crop has suffered, as the UK crop, and has also experienced Bruchid damage. Exports to Egypt have been first on the water but are believed to be in short supply and may already be exhausted.
France appears to have by and large given up on the human consumption bean exports and is focused on shipments for aquaculture, processing and animal feed. As values in the UK market rise France may be a source of imports.
Doubt about their bean crop continues. Drought has resulted in much of the northern crop being fed, and the impact on the southern crop is likely to be reduced in yield with some growers wondering if their pulse crops are worth pursuing this year.
As previously reported, beans are already being offered at a premium over UK crop of US$120 per tonne.
FARM SAVED SEED:
The testing of farm saved seed is always important, but given the quality of much commercial produce, the testing of farm saved seed for germination pest and diseases is vital this year.
PGRO offer a comprehensive seed testing service for peas and beans: http://www.pgro.org/seed-testing/
For the rules on farm saved seed go to http://www.bspb.co.uk/farmsavedseed/
As you plan for 2019, winter bean sowings - perhaps just 3 weeks away don’t forget the….
PGRO Agronomy APP:
The ‘PGRO Pea and Bean Guide’
An interactive agronomy APP. Download free of charge from Apple iTunes and Google Play stores: https://play.google.com/store?hl=en
CropTec Show is on 28th/29th November 2018 at the East of England Showground. It will be the launch date of the 2019 Pulse Recommended Lists.
The next Pulse Market Update will be November 2018.