September 27, 2022
Ahead of his analyst role at the Americas Pulses Congress, Brian Clancey gives Luke Wilkinson a sneak peek into what he’ll be discussing at the event and how he uses data to make predictions.
Brian will be the analyst at the global chickpea and lentils panels at the GPC’s Americas Pulses Congress in Cancun on December 3-5, 2022. Not registered yet? Sign up for the event here.
The story’s pretty straightforward really: journalist turns expert, who turns grain trader, who then creates Stat Publishing. When I started out, Stat was a print publication; I printed it in my garage with a printing press! Then, when I noticed that some farmers were using email, I wrote an email program and I had my first internet customers that way.
The company itself started in 1988, then when it was possible to create a website and start working that way - maybe 1993 or 1994 - I did that too. Eventually we shut down all the print operations and I converted everything online. It all just went from there.
I've expanded over the years in terms of the statistics and the extensive trade report data and import data I gather to create supply/demand forecasts. I still do some writing, but these days it's becoming much more of a statistical service.
Source: https://www.statpub.com/
A few years ago someone asked me that question, and I looked at all the customers and back then I said: ‘My customer is a US trader in special crops like pulses - lentils, peas, beans,’ but since then, we have spread more widely. We have customers in 25, maybe 30 countries all over the world, and readers on every continent.
The numbers go up and down with the economy of the regions. For example, in China at one time there were a lot of bean traders subscribing because China was exporting a lot of beans, but their production has gone down a lot in recent years in favor of soybeans, so those people dropped out. Then, people importing peas came in, when India effectively banned the import of yellow peas.
We did also lose clients during Covid - that hurt us a lot. I had one customer in India who called me and said that they wanted to continue their subscription but they literally couldn't get to the bank! It was at that point I realized the extent of the impact the pandemic would have on the flow of money in the industry.
For whatever reason, I understand numbers really well. I try to balance what you see happening in the market with the human reaction, i.e. what is likely in the mind of a farmer when he looks at his experience with the market right now – how will that affect what he produces, and secondarily, how will it influence what he sells?
In gross terms, you can come up with numbers that work for the marketing year, but what those numbers don't tell you – and this is the hard part – is the day-to-day, week-to-week, month-to-month, which all depend on the willingness of farmers to sell.
If farmers aren’t willing to sell, prices are forced higher because exporters do sell, and they need to cover products, processors need to cover shipping obligations, et cetera. If farmers are overly eager to sell, then the price tends to go down.
The more accurate your data, the better an idea you'll have of how to position yourself, and what you should be pursuing in order to sell a product.
I'll definitely be talking about production levels. I may start doing some guessing about what could happen next year in terms of seeded area in different parts of the world, and then the relationship between production levels/seeded area and the price of pulses. When pulses get too low, farmers are probably going to want to grow more grains and oilseeds, then when pulses are high, you can imagine that pulse acreage is going to increase - I like to cover this relationship.
If I look specifically at Canada, I might begin to look at the gross income potential of peas, lentils, and chickpeas versus that of wheat, durum, and canola.
There is a relationship between acreage, and gross return potential. One interesting tool I use to forecast acreage is to see if gross income potential moves above or below the three-year average. If it moves above, 70% of the time acreage increases, if it moves below 70% of the time it decreases.
However, strangely, once you go past a three year average, the numbers start to fail really fast.
I think this is the human side I spoke about; people don't remember that far back and our idea of history is much more compressed than you think. Farmers in particular react to things like price and movement in these shorter timeframes.
I think there was an expectation of a reduction in area because of competition for land use from canola, in Canada, and soybeans and corn, in the US. That has materialized in the latest numbers for North America.
Last year was a drought year, which just savaged yields. Moisture conditions have been better this year, in fact too much in some areas. This is also having a potential impact on quality and yield, but largely in areas too small to matter. The latest numbers see pulse production rising from 6.3 to 9.2 million metric tons - it's a huge jump from last year, but the five year average is 10.4 million.
Available supply advanced from 8.1 million to 10.35 million metric tons, but the average available supply is 11.93 million tons, so in total, supply is down. Pea yields are below average, and chickpeas yields are down a third from the average.
Some yields are being rated as above average, and some below average in other areas – it seems like a mixed bag.
Oh, now you're into the really hard stuff. I think chickpeas and several classes of dry edible beans are most likely to stay strong. It seems like the United States is going to have a fairly significant import need, so that's going to help to drive values in Canada, and it's going to mean they’ll have a look at Mexico for what they can get.
Mexico imports black beans, a certain amount of pinto beans, and some white beans from the United States. Canada is a participant in that market, but not a very important one. They’re more dominated by the US - that's just a simple case of proximity. It all moves south by rail, or truck.
When it comes to peas and lentils, Canada has probably been more important over the years than the US - that’s down to price and availability.
In general, Mexico has been more of a consumer of pulses that are produced in Canada and the US, however, this past year Mexican exports of pinto beans to the US went up because last year the American pinto beans crop was really poor.
Mexico does always export some beans to the USA, especially chickpeas. That's never going to end, because when it comes to chickpeas, Mexico sets the market tone globally as they grow the most demanding type of chickpea in the world. No one else produces it except them.
Mexico is an important partner in the pulse industry in North America; always has been, always will be. From the perspective of Americans and Canadians, it's more of a buyer, but it is equally a supplier of several specialty types, and fills gaps that can't be filled by North American domestic production.
Of course I’d love it to grow! I want to improve the statistics and the ways in which subscribers can access the data. One dream I have - a difficult one to achieve - is to have a facility for subscribers to do ‘what if’ supply/demand analyses using our data.
A lot of where I see things going is to work more in programming and coding to solidify the data. Excel is difficult to maintain, so if I could move everything over to the survey that would make things a little easier, and less frustrating.
Disclaimer: The opinions or views expressed in this publication are those of the authors or quoted persons. They do not purport to reflect the opinions or views of the Global Pulse Confederation or its members.
