Canadian farmers will plant more lentils and peas this season, betting that strong demand from drought-stricken India will soften the blow of low prices for wheat, corn and other field crops.
Growers will seed a record 5.1 million acres of lentils, up by 30 per cent from last year, and 4.3 million acres of peas, a rise of 16 per cent, Statistics Canada said in its survey of planting intentions released on Thursday.
"It's all-in on India. No one else in the world can consume those numbers. If it doesn't go there, it's not going anywhere," said David Newman of Commodious Trading Inc., a seller and processor of pulse crops in North Saanich, B.C.
Farmers are planting pulses after years of falling prices for their main crops – wheat, canola and corn – amid large harvests in the United States and elsewhere. Wheat prices have fallen 40 per cent in Chicago over the past five years. Corn for grain is down 33 per cent.
"It's not hugely surprising to see farmers exploring other options," said Aaron Goertzen, an agriculture analyst at BMO Nesbitt Burns in Toronto.
"Prices across the board have been so low. If you look at corn prices alone, you'd be surprised to see anybody wanting to plant any of it," Mr. Goertzen said. "But when you consider the fact other crops have been hit really hard the past couple years, you start to see that there aren't many other options."
Acreage for wheat, Canada's largest crop, is expected to be 1 per cent smaller at 24 million. Farmers will trim canola seeding by almost 4 per cent to 19 million acres.
Meanwhile, pulse acreage has almost doubled since 2013. Canadian pea and lentil exports rose more than 35 per cent to hit a record $3.7-billion in 2015, according to Weber Commodities Ltd.
Prices for some pulses more than doubled late last season as India placed large orders.
Commodious Trading's Mr. Newman predicts the same thing could happen this year. "The grower pipeline here is empty. There's nothing in the bins. Yellow peas, empty. Green peas, empty. Green lentils, empty. Red lentils, empty. India didn't have a great year so, come September, they're going to be empty," he said by phone. "Growers respond to market signals," said Carl Potts, executive director of Saskatchewan Pulse Growers. "They look to grow the crops that are in demand in the marketplace."
India, the world's biggest consumer of pulse crops, is facing its second consecutive drought and is expected to boost imports by 20 per cent this year to 5.6 million tonnes. The country of 1.2 billion has a large vegetarian population; lentils, chickpeas and yellow peas are major sources of protein.
In 2015, India bought 30 per cent of Canada's pulse exports, or 1.5 million tonnes.
"India by far is our largest market," followed by Turkey, China, Bangladesh and United Arab Emirates, Mr. Potts said.
Canadian farmers grow most of the peas and lentils eaten around the world. Ninety-five per cent of the country's lentils are grown in Saskatchewan. The province's short growing season and quick-draining fields are ideal for pulses, which are loved by farmers because they restore the soil's nitrogen and interrupt cycles of insects and diseases.
Although 85 per cent of the Canadian crop is exported, Mr. Potts said, North American demand is rising as consumers demand healthy sources of protein and fibre.
Number of acres Canadian lentil growers will seed this year, up 30% from last year
Share of Canada's 2015 pulse exports bought by India, or 1.5 million tonnes