SEPTEMBER 2016

THE NORTHERN HARVEST CONTINUES AS SOUTHERN CROPS ARE EVALUATED

“It will probably be another month before the picture is complete for UK pulse crops 2016, ” comments Roger Vickers, Chief Executive of PGRO. “The Defra June survey indicated a significant increase in crop area. Beans are up 5.2% (to 173,000 ha) and peas up 18.7% (to 49,900 ha). That said, the average yields harvested so far look to be significantly down on crop 2015 and below the long term average, so the full supply and demand picture remains cloudy.”

The cold and wet spring was a major cause of lower crop yields in general, and all crops appear to have suffered - even outdoor flower producers noticed a less productive season.

All commodities appear to have a somewhat pessimistic trade prospect led by the value of feed wheat, but pulse producers should remember the added value of their pulses to the whole rotation, soil and subsequent crops.

Variability has so far been the watchword. It is not unusual to have variation between regions, but there have been unusual differences even between growers and fields at local level. Confident growers who approach crops with the intention of maximising returns, as always, received the biggest returns - but nonetheless have also seen significant dips in yield this year. Typical bean yields reported range from 4.4t/ha to 5.4t/ha, with exceptions.

Pea yields seem to have averaged between 2.5t/ha-3.2t/ha and quality is generally good. Early bean quality by contrast has been poorer than normal. Bruchid levels were initially thought to be low but it seems emergence of adults has been slow and in many cases beetles are emerging in store or are being found dead inside. It is anticipated that more northern bean crops will have less or few bruchid issues but the later harvest will increase potential staining, and crops with higher moisture levels will need to be dried.

Chris Collings, President of BEPA, comments that the Australian crop is again potentially large - but reports of wet weather at a critical stage in crop development is threatening a yield reduction if disease gets hold and remains unchecked. There is still a way to go before the nature of the competition for exports from this production area is certain.

Canadian pea availability is thought to be increasing with cancelled contracts in certain key export markets causing problems. Canadian and eastern European yellow pea productions will dictate market terms. Blue and marrowfat pea availability is thought to be improved too.

Baltic origin bean crops are both smaller and of lower quality than last year, bruchid damage is more prevalent and visual appearance is poorer. Samples seen have not been great and the weaker value of Sterling will present UK production in a better light to buyers.

French bean production from 2016 has been confirmed as low yielding and of poor quality.

Feed bean values have come under pressure as significantly large quantities have been rejected for human consumption and the value of feed wheat has risen slightly. The premium over feed wheat has been eroded, falling from £20/t to £15/t. Feed bean values ex farm range from £140-142/t depending upon location. Values further west are higher, being located nearer to the point of consumption. Beans for feed remain in demand and will find homes in an enthusiastic industry.

Human Consumption Beans continue to be affected by the availability of currency which remains the main barrier to export to Egypt and Sudan. This issue has been present for a long time now and shows no sign of easing. Old trades are still being delivered and so new market buyers are limited. Vessels have sailed, but trade post harvest compared to last year is significantly down. Local values for human consumption have been buoyed by the apparent lack of available quality and the need to cover commitments. Aside from spot coverage, trade is at or around £155-£158/t ex for good quality samples - higher than this time last year. Growers with good samples may choose to talk with their trading partners to understand whether they can hedge their bets by fixing for feed sales or holding out for feed premiums.

Turning to combining peas, the trade has been surprised by the increased level of marrowfat pea production year on year. The crop area has increased 55% in two years. The bulk of the marrowfat increase in 2016 is believed to be by growers without market contracts. There are thought to be few if any UK trade buyers at this time, even for high quality samples, so producers with no contract may have to be patient before securing sales. Contracts for 2017 production are available but at this time they are likely to be open value.

Large blue pea yields are down with good demand, hence the prices for large blues are holding up well at circa £200/t ex for good samples, discounted to circa £170/t for bleaching >10%. Export demand to EU countries has been good - helped by lower currency values and lower continental availability. Micronisers have been active consumers and there may be upside potential in this market with supply more closely matching demand.

Yellow peas remain undersupplied in the local market. The values are governed by imports and Canadian prices but currently enjoy circa £190-£200/t ex locally. At present, these appear to offer a good potential for contracts, even unpriced, as there is a guaranteed market and lower quality risk.