High premiums currently being offered for green peas over yellow peas are expected to entice more acres to the crop in Western Canada this spring, although seed supplies could prove to be a limiting factor.
Spot bids for green peas can currently be found at the historically high level of $17 per bushel, well above yellow pea bids of up to $8.75, according to Prairie Ag Hotwire data. New-crop pricing tops out at about $12 per bushel for green and $8 for yellow peas.
The $4 premium for new-crop green peas will certainly push acres in that direction, provided the seed supplies are there, said analyst Chuck Penner of Leftfield Commodity Research in Winnipeg, noting that any premium over $2 will usually generate more interest in growing green peas.
However, while the pricing may have some farmers looking to switch from yellows into greens, from the demand side the two crops are so different "it's almost like comparing canola and wheat," said Penner.
Yellow peas usually account for about 80 per cent of the peas grown in Western Canada, and export demand for the commodity is much more elastic than for green peas.
For old-crop yellow peas, export movement has picked up recently, and there is still more room depending on what happens with India, said Penner. China remains a steady buyer, and some peas have also moved to the U.S. over the past few weeks.
"On yellows, there is still the possibility to improve on the old crop," said Penner.
There are still some green peas moving at current prices, as Canada is one of only three major global exporters of green peas (including the U.S. and Argentina), said Penner.
However, while a home will always be found for any yellow peas grown in Western Canada, if green pea production increases in the upcoming year there would be little chance of extra buying interest, aside from the feed sector, said Penner.
As result, prices between the two commodities can be expected to narrow in to a more traditional spread.
The weather will also play a role in the pea market going forward. Farmers typically like to get their peas in the ground early, and weather issues in the spring could alter seeding plans if planting is delayed by wet conditions, said Penner.
-- Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.