By R. Bruce Striegler
While many Canadians may be unfamiliar with the term ‘specialty crops, this agricultural subset is a growing segment of Canadian exports. Grains are divided into several classifications, and most specialty crops are known as ‘pulses’, derived from the Latin word ‘puls’ which can be defined as ‘thick soup’. The classification refers to grain legumes including chickpeas, dry beans, dry peas and lentils. While Canadian grains and oilseeds are shipped around the world, India and China are by far the two biggest destinations for Canadian specialty crops. Traditionally, India was the single most important market, but China has been closing the gap in recent years, and actually has recently become the largest market. In fact, so far this year China has already purchased as much as it did during the entire season just a couple of years ago.
The term “special crop” also defines buckwheat, canary seed, forages, ginseng, herbs (medicinal plants), spices, industrial hemp, mustard seed, safflower seed, and sunflower seed. It is a catch-all category for those crops not included in major grains and oilseeds or horticultural crops. An estimated 70 per cent of Canada’s production is exported, including significant quantities of dry peas, lentils, canary seed, mustard seed, chick peas, dry beans, and buckwheat.
CN’s Senior Manager, Specialty Crops, Hamath Sy, says “We like to think of CN as a supply chain enabler, that is, we offer customers end-to-end service with a view to improving efficiency for the entire process.” He explains that in the past, CN has offered traditional grain hopper cars, for growers of Canadian specialty grains. “They’ve been made available to grain elevators or processors who load the grains, ship the product to the port, where it is loaded onto ships or loaded into containers for various markets.” Mr. Sy explains that more and more specialty crops are being produced, and that the market has diversified. “Importers of Canadian specialty crops generally buy smaller quantities of these specialty grains, rather than shiploads of 50 or 60 thousand tonnes. Being a supply chain enabler, we are now making containers available to these smaller shippers.”
While small in comparative volume to the grains and oilseeds, pulse exports are climbing
The seven key Canadian specialty and pulse crops are dry peas, lentils, dry beans, chickpeas, mustard seed, canary seed and sunflower seed. In late December 2014, Agriculture and Agri-Food Canada’s Market Analysis Division calculated the 2014-15 specialty crop ending stocks at 345,000 tonnes versus 623,000 tonnes the previous year. Total exports of the seven major specialty and pulse crops are expected to be 5.280 million tonnes in 2014-15, up from the last estimate of 5,200 million tonnes in 2013-14. Saskatchewan is the heart of the Canadian pulse industry. In 2012, Saskatchewan farmers grew 96 per cent of Canada’s lentil crop, 90 per cent of Canada’s chickpea crop and 70 per cent of Canada’s dry pea crop
Mr. Sy explains that these crops are very small, noting canary seed is about 100,000 tonnes per year, peas are about three million tonnes, yet they are in the same group. “Pulses require a certain type of soil and other specific agricultural conditions. They are grown in a cluster, an area found in southwestern Saskatchewan and southeastern Alberta.” He notes that there is little produced in Manitoba and none in B.C. Mr. Sy says that the industry is in the middle of a revolution. “Specialty crop processors used to be small scale, under-funded operations, often a family-owned and -operated farm, with operators having little expertise in marketing.” Today, he says, these small units are disappearing, and are being replaced by large modern operations with merchandising capabilities around the world.
Mr. Sy explains that pea production is most often successful when grown in rotation with cereals such as barley, spring or durum wheat. “A pulse crop fixes nitrogen from the air and provides a sound way of extending and improving crop rotations. The crop following a pulse crop in the rotation generally yields more than the same crop grown after cereals or oilseeds, and the nitrogen will reduce the cost of applying nitrogen the following year.”
Export capacity key factor for producers
Like any commodity, prices for the grains and pulses rise and fall. In the last five years, with higher prices there have been larger crops of canola and wheat, and fewer specialty crops, including some of the big-acreage crops like the pulses. However, with wheat and canola prices now lower, interest in specialty crops has rebounded as farmers start to look carefully at profitability. This past season saw field peas in Saskatchewan leap in popularity, with an estimated 2.6 million acres in production, a 21 per cent increase over the year before, according to StatsCan.
When asked whether processors are moving to containerize more of their export traffic, or whether they prefer the older hopper/bulk carrier method, Sy says “Processors are looking at the capacity that is available. Right now it is easier to add capacity through containers rather than hopper cars.” He continues, explaining that the container model is most suitable for fragile product. “If you look at peas, yellow peas are much harder and green peas are very fragile. They do best with less handling, making containers a perfect transport solution.”
Sy says that while containers may be a little more expensive than hopper cars, the advantage is that it helps exporters protect product quality and makes deliveries more portable and secure. Furthermore, processors are trying to become more multi-functional by building facilities that can load bulk and containers. “They’re collecting large volumes of product and have the ability to use a variety of transfer methods.”
Explaining how steamship lines operate large vessels transiting the Atlantic and Pacific, Mr. Sy notes that they arrive at Canadian ports loaded with full containers. “But to further participate and grow their business they need to find export commodities to off-set their round-trip costs. Our job at CN is to help where we can, to find these export commodities for them, one of them being the specialty crops.” CN’s role, he says, is to provide a platform where they can get the boxes (containers) moved from centres like Toronto, Montreal or Chicago, repositioned to cities like Saskatoon and excite the steamship lines about this business opportunity.