The feed pea benchmark, a bi-weekly pricing reference produced by the three prairie pulse grower associations, has shown steady decline as competing protein sources fall in price. This analysis does not determine the actual price for feed peas in the ration, but rather, the relative value of peas given the cost of competing feed ingredients. Local supply and demand conditions will determine the actual price of peas, while this benchmark can provide ammunition for buyers and sellers as well as provide insight into trends over time. It can also help set a floor price in which to consider when selling higher quality product into the human consumption market.
The most recent benchmark for the week of Sept. 21 to 23 saw the Central Alberta benchmark at $235.80/mt ($6.42/bu), Central Saskatchewan at $228.87/mt ($6.23/bu) while Southern Manitoba's benchmark was calculated at $229.81/mt ($6.25/bu). These benchmark prices are comparable to the actual feed pea market, with trade reported to take place between $220 and $320/mt in Alberta, $220/mt in Saskatchewan and $230 to $240/mt in Manitoba in the Sept. 21 to 25 period.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT T
The benchmark itself is sensitive to the fluctuations in the markets seen for competing feed ingredients, namely, barley, wheat, corn, corn DDGS, canola meal and soybean meal. Over the May through September time frame shown on the attached chart, the Saskatchewan feed pea benchmark fell by 27.9%, while the competing feed ingredients ranged in price from 37% lower in the case of barley to 4% higher in price, as seen in the quoted price of soybean meal.
The benchmark price has also fallen significantly through the month of September, as grain prices face pressure from harvest activity on the prairies as well as the pending U.S. harvest of corn. Soymeal prices have also fallen significantly as suppliers began to price product against new-crop October futures after the much higher September futures expired, while a Canadian dollar rally within the month also helped contribute to a $70 to $75/mt fall in soymeal across the Prairies as of the most recent report.
Future moves in this benchmark may be highly influenced by the yield data coming from the fields as this harvest progresses.
Cliff Jamieson can be reached at cliff.Jamieson@telventdtn.com
© Copyright 2013 DTN/The Progressive Farmer. All rights reserved.