The changing US demand and pulse growing in the Palouse/
An Interview with Mike Anderson of Anderson Northwest

Can you tell me about Anderson Northwest: the main aims of the business and a little about your history?

Anderson Northwest was founded in 2003 by my oldest sister, Jessica Emtman, and my father, Marty Anderson. There was an opportunity at the time to help push more production of premium pulses within the Palouse by offering origination and market access to growers that were interested in diversifying their crop rotations. Marty had an extensive background within the industry during his time running facilities and merchandising for companies such as Coast Trading, Continental Grain, Cargill, and Lewiston Grain Growers. Both are still very active in our company and work with our grower base hand-in-hand so we can consistently offer our premium pulse products and varieties to our customers. Our main goal as a company is to add value throughout the supply chain, bringing mutual returns to our growers and our customer base with our premium pulse products.

Tell us a little bit about your products.

Pulses are and have always been our main products. Throughout the years we have also worked with our growers and customer base to supply canola, barley, specialty wheats, flaxseed and millet. Currently we specialize in dimple green peas, also known around the world as banner type. That is a main product offering for us but our growers also raise for us high protein yellow peas, sierra type Kabuli chickpeas, pardina lentils, as well as small amounts of other pulses to meet our specific needs or customer needs.

IQF (Individually Quick Frozen) pulses are a secondary product that we helped pioneer in 2013 and have sold into the domestic market under our 13 Foods brand at the retail grocery level and foodservice. These items have included pardina lentils, Kabuli chickpeas, green lentils, black beans, red beans, kidney beans, pinto beans, etc.

It seems that farmer relationships are vital to you. Can you tell me a little about your growers?

Our grower relationships are the foundation of our company. We work in a mutually beneficial relationship with our growers, working hand-in-hand with them in each step: seed, production practices, harvest, and ultimately throughout the sales process. Our family history in USA agriculture started with my great grandfather when he homesteaded on the Palouse and began farming. This background has kept us vigilant in making our growers our true partners. We discuss sales opportunities, market conditions, and logistical opportunities with them to get their feedback and ultimate buy-in for our day-to-day process. We are very transparent with them regarding our customers’ thoughts and feedback and equally transparent with our customers regarding our growers’ thoughts and feedback.

Our growers are multi-generational family farmers who are very active within the pulse industry, serving on state and oversight boards and committees. We pride ourselves with only working with growers that deeply understand how to grow pulses and care about producing consistently high-quality products. This helps us create a unique relationship with our growers and fosters long-term relationships with them, allowing us to consistently offer high quality products to our customers. These are the reasons why we always tell our customers that we only work with the highest quality, world-class growers.

Where are your main markets? 

Our main market has always been the USA domestic market but we have found niche markets throughout the world for our specific types of unique product offerings. For example, there are markets that have a demand for dimple green peas, which standout for their increased water absorption and retention for snack products and canning. Then there are different markets for sierra-type Kabuli chickpeas, which really thrive in markets that demand their visually light, creamy color.

About 5 years ago, we decided to push more into export markets to continue to explore ways to bring value back to our growers and diversify our customer base. As we have explored different markets, we have found niche markets that work best for our unique product offerings and our operation.

How have you seen business evolve over the past decade overall, and then over the past couple of years with regard to Covid (and related disruptions) and the climate?

Business is an ever-evolving and living organism. Over the last decade, many new aspects have changed the dynamic of business from communication methods that are now run via social-media apps to uses of products that demand new quality aspects, such as protein levels in pulses. It has been an interesting decade to be in the pulse industry, as new innovation has stretched demand and changed supply flows. The USA pulse industry is a great example of this, as we have really shifted from using the domestic market as a small hedge against exports as our main market focus, to almost the exact opposite now with the export market now being a small hedge against the dominant domestic market.

When the Covid disruptions are factored in, business has evolved quickly and dynamically recently. Demand needs have swung wildly from foodservice to retail grocery and now back again. Covid disrupting logistics and creating supply chain issues has definitely caused a large set of headaches but also brought unique opportunities. One of my favorite sayings is that opportunities abound in all situations. At Anderson Northwest, we put them to use to bring value back to our producers and customers.

You handle everything from sourcing through marketing to logistics. Does that all-in-one approach make things run more smoothly for your customers?

We have found that it definitely helps create a smooth and more predictable environment for all aspects of our business. If/when our customers handle the logistics, we have found that it creates great uncertainty with shipment timelines and payment timelines for us and our growers are affected as a result. We also believe that by directly controlling sourcing, starting with seed, for our growers, we avoid huge uncertainty and short situations for our customers. We can't perfectly eliminate all these issues but it helps us mitigate them to a great extent.

How did your 2021 production compare to average and to 2020?

The 2021 production for our dry peas was hit very hard by the drought in western North America regarding yield, however our quality stayed at its consistent very high level, averaging U.S. No. 1. Comparing yields, the 2021 crop averaged about 35% our normal averages and 25% compared to 2020, which was one of the better historical crop-yield years.

How are the new plant protein processing plants in North America (Roquette, ETG, etc.) affecting growers’ pea-planting plans? Is there room for growth over the next few years and, if so, in which areas?

The launch and ramp-up of capacity for new protein processing plants in North America, along with the expansion of existing plants, will cause greater competition for acres with other crops. USA growers are renowned for their sustainable growing practices, including crop rotations that benefit soil and plant health, bring greater yields and consistently high-quality dry peas. These crop rotations give growers choices when choosing which crop to plant and the number of acres of each crop to plant. This freedom of choice causes great competition between crops including pulses, oilseeds, and grains.

There is room for growth for dry peas within the USA, with eastern Montana, North Dakota, South Dakota, and Nebraska bringing the most potential, as those are the main areas where the processing plants currently are and where the majority of dry-yellow peas are grown. However, those areas are also big oilseed- and grain-growing areas, so price competition will drive planting decisions.

In Canada, the launch and ramp-up of capacity in pea-protein processing plants will put pressure on their overwhelmingly export-based dry-pea market with a greater percentage of dry peas staying in the domestic market and with premiums being attached to protein percentage. Those factors will put pressure on the current export market to China and the historical market to India if/when they open back up their dry-pea market.

How is a smaller USA production in 2021 affecting prices and whether or not contracts can be met?

The smaller USA production has brought prices back to where they were a few years ago in the domestic marketplace. It has also kept most of the production within USA domestic markets, with few exports. Forward contracts are always honored within the USA industry, domestic & export, which helps create assurance for customers purchasing USA-origin product. Selling the farmer short is a practice rarely, if ever, used within the USA trade. Our hallmark as an industry is partnering with our growers, so we can assure our end customers that, after a contract is signed by both sides, the product will be delivered.

What do you foresee in terms of domestic consumption in the post-Covid era, if it ever arrives?

As Covid restrictions are relaxed and events, foodservice, and at-home get-togethers return to normal, I see domestic consumption returning to normal pre-Covid consumption levels and then increasing as we move forward.  Those areas of consumption are a large portion of chickpea and bean usage domestically. In addition, the continued push for plant protein options is really going to rely on these products. They are so versatile and have a great nutrition profile, so we are beginning to see greater usage in foodservice, both in restaurants and in schools.

These factors will continue to make the USA domestic market the dominant player for our production, which is a change as the USA has been historically a net exporter. It is a factor that industry members have been stating for a few years, but the emphasis on plant protein and climate-sustainable food has increasingly accelerated domestic demand.

Could you comment on how things changed in the Palouse with the introduction of pulses to the region?

On the Palouse, which is an area in eastern Washington and northern Idaho known for its fertile soil and perfect climate for high-quality agriculture production, the introduction of pulses started a few generations ago. In fact, my grandfather was one of the pioneers of growing pulses in the region. Their introduction helped stimulate crop rotations that have continued to become more diverse as growers become experts in sustainable soil practices within the region. Pulses have helped increase wheat yields in the region through their natural nitrogen-fixation properties, and this has created a willingness by the past few generations of farmers to look at other alternative crops. If done correctly, crop rotation can lead to better water retention, less fertilizer usage and better weed and disease control. Now, Palouse growers have rotations that extend between 3-7 years on their farms. This has caused great competition for acres each year, which supports prices to the growers for all crops. When specifically talking about pulses, there is stiff competition within the different pulse types for acres and with other crops such as canola. Wheat is still the dominant player so the net return per acre to the grower must compete with wheat and canola, or growers will not plant the pulse acres we need to support the demand of our customer base.

I see that your company philosophy is very important to you. Can you please elaborate a little on what makes Anderson Northwest unique and why those virtues are such a major aspect of your business?

Anderson Northwest is unique in our belief in, and practice of, bringing the whole supply chain together in a collaborative and mutually beneficial relationship, from our growers to our customers. Our transparency at both ends really sets us apart and drives us to push continually to offer the highest quality products. At times, this means we are not a fit for everyone, on both the grower and customer end. We hold our growers to a very high standard, and, in return, our transparency gives them a unique market perspective. Ultimately, our goal is to bring them back the value that our high standards and high-quality products demand. This drives us to find customers who also have a unique demand for high-quality products and are willing to work within a collaborative and mutually beneficial situation. We always try to find ways to bring value to our customers other than just being the low-price leader. We understand that is not a fit for everyone, but it allows us to live our company philosophy and has brought us rewarding opportunities.