Pulse Market Insight #254

Yield is the Big Wildcard

The size of the 2024 Canadian pea crop is still far from certain. At the end of June, StatsCan will update its acreage numbers, including a breakdown by type. This should help answer a few questions, but (as always) there will still be some debate about those estimates. We’re expecting total seeded area of peas will be larger than StatsCan’s March estimate of 3.1 mln acres, which was only 2% more than last year’s low point. We could also find out in this latest report whether this year’s high prices for green peas shifted more acreage in that direction.

Besides the acreage questions, there’s lots of speculation about yields in 2024. At the risk of stating the obvious, yield outcomes are an even larger variable than acreage. At this early stage of the year, conditions are looking very favourable across much of the prairies but if we’ve learned anything in the last few years, it’s too soon to start counting chickens before they’re hatched. The above-average rainfall so far could stop. On the other hand, the plentiful moisture could also end up causing yield losses from disease.

Pea yields have been extremely variable in the last few years and starting in 2021, have generally been below the longer-term averages. Estimates of 2024 output vary widely depending on which years are used in calculating an “average” yield. For example, the latest 5-year average yield which includes some disappointing years works out to 33.9 bu/acre while the 10-year average is 1½ bushels higher. And if we use the five years prior to 2021, the average works out to 38.9 bu/acre, five bushels more than the recent average. And while no one is counting on a record yield, it’s worth noting that the high point in 2013/14 was 43.9 bu/acre, 10 bushels higher than the recent average.

It’s worth trying out a few possible scenarios by plugging in these various yield numbers, which result in some very large changes in crop size estimates. Keep in mind, we’re expecting seeded area of 3.5 mln acres versus StatsCan at 3.1 mln. Based on this higher acreage, the recent 5-year average yield of 33.9 bu/acre would return a crop of 3.17 mln tonnes, which would mean 2024/25 supplies of 3.41 mln tonnes, still a little snug. The 10-year average yield of 35.4 bu/acre would result in a 3.31 mln tonne crop and a larger supply of 3.55 mln tonnes, slightly more “comfortable”. The pre-2021 average yield of 38.9 bu/acre would mean a crop of 3.63 mln tonnes and supplies of 3.88 mln, getting into the “heavy” category. Finally (not that we’re predicting it), the record yield of 43.9 bu/acre from 2013 would result in a much larger crop of 4.10 mln tonnes and supplies of 4.34 mln tonnes, getting into burdensome territory.

While there is potential for in 2024/25 supplies to get heavy, the chart also shows that even at the high end, supplies would still be lower than several years before 2021 due to lower seeded area in 2024. Keep in mind though, the demand side of the equation is also very different in 2024/25 than it was a few years ago, when Canada dominated export markets in a big way. With Russia now in the picture as a large exporter, the added competition will make dealing with large supplies more challenging.

There are still plenty of things that could happen to the 2024 pea crop, either good or bad. It’s important to be aware of both possible outcomes when reviewing marketing plans for 2024/25. And as the growing season progresses, the outcome will become more certain, causing prices to respond.