What a difference a couple of years make. It was not that long ago Saskatchewan Pulse Growers (SaskPulse) was sitting on a $30 million surplus and the projection was for the surplus to just get bigger and bigger. Now, after what may have been the most disruptive year in Saskatchewan’s pulse growing history, reducing the surplus has taken a back seat to cutting costs.
Corey Loessin, chair of SaskPulse, says the main driver of this disruption has been the withdrawal of India from the marketplace. “The entire year was notable because India has been absent from the market, and India was really our biggest pulse customer.”
A couple of numbers can hopefully put this into perspective. SaskPulse has a shortfall from their budgeted income of 40 percent, to the tune of $7 million. Because the SaskPulse levy is a percentage of pulse growers gross receipts, this means farmers have seen a 40 percent drop in their income from their pulse acres. That’s a pretty significant hit to the bottom line, Loessin says.
The disruption, however, has been very uneven. China has stepped in and purchased a good quantity of the yellow peas that would have gone to India but the lentil market is still mired in the doldrums. Loessin says that yields were also very inconsistent in 2018. Many, but not all, areas in the south had very poor yields. Many, but not all, areas in the north had very good yields.
SaskPulse has decided to continue to reduce its surplus in the face of these very trying times. It will keep its levy at .67 per cent of gross value of sales, so that it does not add to the financial burden of its pulse producer members.
Some of the costs that SaskPulse faces are fixed and can’t be brought down quickly. But there are other costs that can be cut in the short-term and still give substantial savings. “Some of the variable costs have included things like delivering information to growers electronically, vs. print form and that does save quite a bit of money actually, about a half a million dollars,” says Loessin.
Pulse farmers and the pulse industry are going through some very trying times, but they’ve been through trying times before. While this might be the most disruptive year in Saskatchewan pulse history, the industry is still very strong and with the demand for protein growing each year, and there continue to be good things on the horizon, he says.