Canada Markets

The attached graphic shows the 20-year trend in combined dry pea and lentil acres in Canada. Combined acres topped at an estimated 9.85 million acres in 2016 while falling close to 8.5 million acres in 2017.

The earliest of estimates out from Agriculture and Agri-Food Canada suggest combined acres could fall a further 24.4%, to 6.425 mmt, which includes a 27% drop in lentil acres, to 3.212 million acres, and a 21.5% drop in peas seeded, to 3.212 million acres.

There may be reasons to believe the drop will not be as steep as forecast in these early numbers. Industry participants are pointing to the bigger picture that will require India to return to global markets for supplies in the future, which may be the encouragement needed for traditional growers to maintain rotations with seed they already own as opposed to switching to another crop.

As well, a study shown in this space in the past few weeks shows that on average over the past three years, AAFC's early estimate of acreage seeded to peas has overstated dry pea acres by 2% while understating lentil acres by an average of 2.7%.

Should acreage fall by the amount seen in this early forecast, combined acreage would dip 21% below the 20-year trend, which is the largest deviation below trend since 2011 when the estimated acreage of 4.995 million acres dipped 22.6% below trend.

Given the last two sharp drops in seeded acreage, the first from 7.07 million acres in 2010 to 4.995 million in 2011, as well as the drop from 9.85 million acres in 2016 to 8.498 million acres in 2017, we look at the year-over-year change in acreage of competing crops for insight as to which crops benefit from the shift from pulse acres.

Three crops stand out as having seen seeded acres increase in both 2011 and 2017, given the sharp drop in peas and lentils. Acreage of canola, oats and prairie soybeans increased in both of the years in question, with canola the largest gainer on an acreage basis while on a percentage basis, prairie soybeans averaged the largest growth over these two years.

Crops that showed an expansion of acres in one of the two years include durum, where acres grew by 27.3% in 2011, while flax acres expanded by 10.5% in 2017. Interestingly, spring wheat acres fell in each of the two years in question.

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Cliff Jamieson can be reached at cliff.jamieson@dtn.com

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