What are the Feed Benchmarks? - PulsePoint
September 21, 2017
Benchmark pricing tool helps pulse producers market their feed peas and faba beans
by Trudy Kelly Forsythe
Producers considering selling their field pea and faba bean crops into the feed market as an alternative option will want to check out the Saskatchewan Pulse Growers (SPG) and Alberta Pulse Growers (APG) bi-weekly feed benchmark reports.
Originally launched by Pulse Canada in January 2009 to serve as a pricing reference for buyers and sellers of feed peas, the benchmark has grown to include faba beans. This third-party, online tool provides a transparent, unbiased pricing reference not only for the pulse, but also the feed, and livestock industries.
“Farmers can sometimes have a hard time gauging the value of feed peas and faba beans in Western Canada,” says Ron Gibson, president of Gibson Capital, the company that developed the benchmark methodology. “One way to estimate their value is to look at the prices of other competing feed
ingredients that have better price discovery, i.e. for which reliable market prices are readily available.”
Setting the Price
The feed pea and faba bean benchmarks are based on the value of a wide range of other feed ingredients, such as feed wheat, barley, canola meal, and more. Gibson says the benchmark models determine what price feed peas and faba beans would have to trade at in order to be competitive in a hog
feed ration in Western Canada.
“In other words, based on the nutritional characteristics of feed peas and faba beans, what price would the farmer have to sell at in order to displace other feed ingredients?” says Gibson, explaining theactual calculation is done using a least cost, feed-ration program similar to what many hog operators use to optimize their hog diets. “The expectation is that actual prices will trade in a range around the benchmark prices based on various other considerations such as location.”
It is a challenge to capture the actual size of the feed market for field pea and faba bean crops as it is not accurately broken down. It varies by crop year, exports, and grain quality. The pulse industry uses swine to calculate the benchmark because it is the largest market for feed peas and faba beans
in Western Canada. Poultry and dairy cattle are other, smaller markets.
Both field peas and faba beans offer livestock a supplementary protein and starch source. Dr. Eduardo Beltranena, a feed research scientist with Alberta Agriculture and Forestry Livestock Research and Extension Division, explains that entire field pea plants, including immature pods, can be cut and layered with green barley to increase the protein content of silage for dairy cows as part of their winter diet. As for feed grain purposes, field peas and faba beans are ground and mixed into feed to provide not only supplemental protein, but also as an energy source.
“Both field peas and faba beans have quite a bit of starch,” says Beltranena. “There is a misconception they are just protein, but they are not. Feeding both faba bean and field pea protein (approximately 28 per cent protein in faba beans and 22 per cent in field peas) greatly complements the amino acid value of canola meal. The slower digestible starch in pulses also complements the more rapidly digestible starch in cereal grains like barley and wheat.”
Faba beans were added to the benchmark in 2015 as they became an increasingly popular crop with farmers. Faba beans are gaining popularity because yields are generally greater — about one tonne per hectare more than field peas, says Beltranena. “Not only are they easier to harvest but also yields are higher so it is becoming the preferred rotational pulse crop. Faba rules when it comes to kilograms of dressed pork per unit of crop land. But field peas yield higher when hotter and dryer agronomic conditions prevail.”
Overall, the benchmark helps crop growers cast selling opportunities into the feed market. For the latest feed pea and faba bean benchmark reports, visit the Markets section of the SPG website at saskpulse.com.