PGRO PULSE MARKET UPDATE (24.07.14)

Crop Overview

With old crop 2014 essentially long since finished, the 2015 crop is eagerly anticipated. Growing conditions for most of the UK have been almost ideal since the crops were sown. Temperatures have been warm without being too hot, and regular rain has ensured the crops have generally developed without any significant stress. As a result, many crops have relatively shallow root systems, not having had to follow the moisture through the soil profile. This poses a potential risk for grain filling if a prolonged hot dry spell is now encountered. The moist mild conditions have also been ideal for both pests and disease. Pest and disease control and attention to detail at harvest time will now be key to ensuring good quality grains and yield for all pulses.

CAP Reform

The announcements have been favourable for pulse growers, with peas and beans qualifying for both diversification measures and Ecological Focus Area status (1ha pulses counts as 0.7ha for EFA purposes). The message from the trade is that growers plumping for pulses should focus very hard on producing good quality produce.

Markets

Contracts for growing pulse crops 2015 have been in strong demand and uptake swift during the late spring with growers forward planning their rotations and securing the pea and bean varieties of preference.

Markets are expanding and new markets are developing for UK produced peas and beans. Good quality is needed to both secure and cement the UK’s reputation for quality at home and abroad. Poor quality produce will struggle to find a home and will in all probability suffer a significant price penalty.

PGRO is available and ready to assist growers with their concerns and enquiries about agronomy and how to achieve both optimum yield and good quality produce. A significant increase in crop area will inevitably result in a downward pressure on price. However, this is all relative to other commodity grains and, in this respect, pulses have held up remarkably well, continuing to hold a significant premium forwards.

A lower market value also represents an opportunity, as with lower prices demand will also increase. Local buyers are set to return more robustly in animal feed and in aquaculture. Brand new markets are also opening in snack foods and alternative uses for pulse flour and protein are applied.

Feed beans

Currently trading ex 2014 crop at a £70 premium over feed wheat ahead of harvest. For growers seeking to put a base in their marketing, this seems like a tremendous opportunity given the general fall being seen in other commodity prices. How long this premium will be sustained is uncertain.

Contracts are already being taken for crop 2015 crop with premiums of £40 over feed wheat. Again representing a significant opportunity to secure a competitive base price from which to work.

Human consumption beans

Export markets remains full, amply supplied by Australian produce until the European crop is harvested. The prospects for the market, however, remain strong and demand is almost certain to continue to rise in the main export markets of North Africa and the Arabian crescent.

The key to enabling the UK trade to retain and further develop the potential of these markets will be having plenty of good quality produce available. Premiums for human consumption will be driven by availability and, whilst there is no trade currently, typically £15 - 20/t is available. Rising currency will present challenges to exporters with exchange rates at USD1.7/ £ making imports more expensive for customers.

Combining Peas

Marrowfat peas are sold out and the new crop will start with a premium for good quality samples. Forward prices at around £350/t are available.

Quality blue peas will also be in demand at over £250/t but the penalty for a poor sample will be significant- colour retention is critical to obtaining the best margins.

Yellow peas are very vulnerable to intense price pressure from European production and Canadian sources and take a very small market share. Growers of yellow peas would be well advised to obtain a contract before deciding to produce.