Opportunities for Canadian Faba Beans Saskatchewan Pulse Growers Dr Julian McGill, Dr Willa Finley, & Dr Joe Feyertag
Overview 2 Aim: to understand the production and end-use of Canadian faba beans and identify which sectors present the best opportunities for future growth. 1. Overview of global production and consumption of faba beans 2. Challenges for Canadian faba beans 3. Opportunities for Canadian faba beans 4. Where we are today Are the current varieties available sufficient to enable demand for faba beans to grow?
Global demand for faba beans
Global faba bean consumption has grown strongly Change in consumption of faba beans between 1995 and 2015 ('000) 4 Change in consumption of faba beans, 1995-2015 ( 000 tonnes) 1,000 900 800 700 600 120 111 1 74 25 240 15 92 107 831 500 400 300 200 100 0 480 75 Decline Growth
However, it has been matched by production increases Change in production of faba beans between 1995 and 2015 ('000) 5 Change in production of faba beans, 1995-2015 ( 000 tonnes) Production growth in Ethiopia has kept pace with increased demand Egypt has shown a fall in production in the face of demand increase 1,400 1,200 1,000 800 600 400 503 234 132 131 104 79 65 22 38 123 234 831 Production declines in the UK and China have reduced their net exports 200 0 Decline Growth
Import demand for faba beans is dominated by Egypt 6 Global consumption of faba beans is over 4 million tonnes per year, 42% of which falls on China. Around 20% of this demand (750,000 tonnes) is imported. However, this import demand is dominated by just one player with 71%: Egypt. Distribution of global faba bean consumption, 2013-2015 Distribution of global faba bean imports, 2013-2015 Morocco 4% Sudan 4% Italy 2% Ethiopia 14% Other 17% Egypt 16% China 41% Norway 4% Sudan 2% Italy 3% Saudi Arabia 5% Other 15% Egypt 71%
Australia, France and the UK compete for Egypt s imports Main faba bean export routes, average 2010-14 (tonnes) CANADA NORWAY UK FRANCE EGYPT SAUDI ARABIA INDONESIA AUSTRALIA > 150,000 100,000 150,000 100,000 50,000 < 50,000 7
Challenges for Canadian faba bean exports
Egypt is the only viable export market in the future 9 Change in net trade of faba beans, 2015-2025 ( 000 tonnes) Change in net exports/imports of faba beans ('000 tonnes) 300 250 200 150 100 50 0 129 52 52 23 8 3 6 25 49 58 122 Australia: potential to increase acreage UK: low rapeseed prices will benefit production France: greening policies will benefit production China: self-sufficient Ethiopia: high population growth Imports Exports Egypt: population growth and limited land
Canadian exports take place within 3 months Share of exports Share of total exports each month (2014/15) 30% 25% 20% 15% 10% 5% 0% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May France United Kingdom Canada Australia Canada produces varieties* that can meet requirements of Egyptian consumers, but: 1. Insect damage (lygus bugs) affects aesthetics 2. Short export windows due to storing difficulties & need by European producers to recoup costs *Malik FB 9-4 10
Egyptian preference is for a specific type of bean 11 Lower priced imported bean (left) and higher priced domestic baladi bean (right) Preferred bean in Egypt is shown on the right. Tannin: seeds containing tannin are preferred for food-use due to bitterness. Low-tannin seeds are used in feed due to higher digestibility, although there are some food applications as well (e.g. falafel). Seed size: medium/large seeds are preferred for food-use, especially when consumed whole. They are also preferred for processing into concentrated protein fractions.
Australian faba beans are viewed as the highest quality Export unit values (US$/tonne) 12 Export unit values from France, Australia and the United Kingdom 600 500 400 300 200 100 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 France Australia United Kingdom The average premium for Australian over French beans over the past 2 years has been 60 US$. 1. Australian faba beans have no problems with insect damage 2. All Australian faba beans are large, high tannin varieties
Therefore, potential for exports is limited 13 Challenges Very short window for exports between EU and Australian exports Very strict enforcement of unrealistic phytosanitary measures in Egypt Shortage of foreign currency in Egypt Strong competition from high-quality exports from Australia Opportunities Premium of high quality Canadian exports to Egypt (Malik) is CAN$ 75/tonne Our farmers can grow the type of beans they [Egyptians] want, but there isn t enough of a premium UK Trader We had a shipment stuck in Egypt because it didn t meet some specifications eventually it was allowed in but it was expensive Canadian Trader If we miss that window [for exports] by even two weeks it s very bad for us Pulse trader
Opportunities for Canadian faba beans
Food and Fractionation 15 Currently, the domestic food-use of faba beans is restricted to the market for ethnic foods which has not been growing. However, there are two main routes in which the use of faba beans in food could increase: 1. The use of flour from faba beans in bakery and confectionary products 2. The use of faba bean protein fractions in food Remember, large, tannin varieties are preferred for food-use
Faba bean flour 16 Market for pulse flour is relatively small at 100,000 tonnes, predominantly made from yellow peas and lentils. Although pulse flour can introduce discoloration and alter the taste or handling characteristics of products, it can also: 1. Increase protein content 2. Increase fibre content 3. Lower glycaemic index Issue: in order to be labelled as a good source of protein and fibre, pulse ingredients need to be recognised by the Canadian government. This requires investment in research to prove claims. Outlook: experimental stage with CIGI, Saskatchewan Food Industry Development Centre and private companies (Warburtons, AGT).
Fractionation is limited due to the starch component 17 Challenges Production of pulse protein fractions is underdeveloped in Canada (with the exception of pea) No functional advantage of pulsebased proteins over soy protein Concerns over vicine and favism Need to find a value for the starch component in pulse crops Opportunities Better health and environmental credentials: pulses are non-gm (unlike soy), non-allergenic (unlike soy) and plant-based (unlike animal proteins) Perception that companies are willing to pay a premium for protein produced in North America High-quality pet food market We are putting in double the effort to market each pound of starch than for each pound of protein Processor Companies will pay a premium for protein concentrates which are made in North America Pulse trader
Despite higher protein, faba beans are cheaper than peas 18 Price and protein adjusted price of pulse crops (US$/tonne) Despite their higher protein content, faba beans are cheaper than peas. Faba beans higher protein content means it is possible to produce protein concentrate simply though dry milling. Disadvantage is the vicine content of faba beans (current breeding programmes are underway). Fava beans Feed Peas Yellow peas Chick peas (Desi) Soybeans Lentils (small green) Lentils (Red) Lentils (large green) 0 500 1,000 1,500 2,000 2,500 3,000 Average price, 2013-15 ( US$/tonne) Price Protein basis
Feed markets are driven by livestock producers 19 Challenges Insufficient volumes for large cattle feed market Faba beans have a higher protein content and are usually CAN$10/tonne less than peas. It s great Trader Pig and poultry producers are driving the market ( ) about 80% of feed is produced by livestock producers Feed producer Opportunities Used by hog and poultry farmers, many of whom grow their own faba beans Feed mills purchase faba beans when they are at a discount to peas From a feed perspective vicine is not an issue, Poultry farmer Good amino acid profile high lysine Higher protein content than peas, despite being sold at a discount Local supply source reduces the cost of transportation. Therefore increasingly replacing imports of soybean meal Starch in pulses is viewed as a good source of energy for animals
Large potential demand for faba in pig and poultry feed Faba bean demand for feed ('000 tonnes) 20 Potential faba bean demand in pig, poultry and salmon feed by region Faba beans can constitute between 15% (conservative) and 30% (optimistic) of pig and poultry feed. 250 200 150 101 66 This would create between 220,000 tonnes to half a million tonnes of demand within Alberta and Saskatchewan alone. 100 50 0 51 33 148 130 65 74 3 7 Conservative Optimistic Conservative Optimistic Conservative Optimistic Pig Poultry Atlantic Salmon Alberta Saskatchewan Canada
Cattle feed is enormous but price sensitive Faba bean demand for feed ('000 tonnes) 21 Potential market size for faba bean in dairy and beef cattle Incorporation rates in feed for dairy and beef cattle are even higher at 20% (conservative) to 30% (optimistic). However, this market requires sufficient volumes which are not currently available. Interest in use of hulls from fractionation. 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2,303 1,535 4,740 3,160 30 106 45 159 Conservative Optimistic Conservative Optimistic Cattle (Dairy) Cattle (Beef) Alberta Saskatchewan
Faba protein concentrate can find use in salmon feed Faba bean demand for faba bean protein concentrate ('000 tonnes) 22 Potential market for faba bean concentrate in feed by region and species Faba protein concentrate incorporation rates are lower for pig and poultry (only for young animals) but can reach 5% (conservative) to 21% (optimistic) for Atlantic Salmon. Issue: price and volumes available. 120 100 80 60 40 20 0 113 10 10 27 7 22 22 4 5 9 Conservative Optimistic Conservative Optimistic Conservative Optimistic Pig Poultry Atlantic Salmon Alberta Saskatchewan Canada
Where we are today
Canada produces medium-sized, low tannin faba beans 24 Malik FB 9-4 is the only variety that is produced in large volumes and that is suitable (large, high-tannin) for the Egyptian export market. Taboar and Fatina are very limited and their export trade has dried up. Snowbird and CDC Snowdrop, which are medium-sized, low-tannin beans, dominate production. Distribution of Canadian faba bean production by variety, 2015 Distribution of Canadian faba bean production by size, 2015 Unknown 10% Unknown 10% Small 13% Tannin 19% Large 12% Low tannin 71% Medium 65%
These beans are suited for the domestic feed market Food: 15,000 tonnes for food-use at ethnic food marketers Feed: 100,000 tonnes consumed as feed. Varieties include Snowbird (57% of supply) and CDC Snowdrop Exports: 45,000 tonnes split evenly between Malik (to Egypt for food) and smaller varieties Distribution of Canadian faba bean production by variety, 2015 Faba bean consumption by main end-use, 2015 Name Variety Seed size Enduse % of production Snowbird Low tannin Medium Feed 57% CDC Snowdrop Low tannin Small Feed 13% Malik (FB 9-4) Tannin Large Food 10% Taboar Tannin Small Feed 7% Tabasco Low tannin Medium Food 1% Florent Tannin Large Food 1% CDC Blitz Tannin Small Food 0% CDC Fatima Tannin Medium Food 0% Feed 62% Exports 28% Food 10% 25
Production ('000 tonnes) Faba bean production has increased by 350% since 2013 Faba bean production in Canada by province, 2013-2016 200 180 160 140 120 100 94 80 100 60 40 20 0 56 20 30 11 4 4 9 2013 2014 2015 2016 Manitoba Saskatchewan Alberta 26
Production ('000 tonnes) And will increase further in 2016 thanks to good yields Faba bean production in Canada by province, 2013-2016 200 180 160 140 84 120 100 94 80 100 60 40 20 0 76 56 30 30 11 4 4 9 15 2013 2014 2015 2016 Manitoba Saskatchewan Alberta 27
Faba bean acreage will continue to grow with pulses Share under different crops 28 There has been a large increase in the production of faba beans. Although the harvest will decline this year due to record plantings and depressed prices in 2015, the longer term potential for growth remains very high. This is the result of area shifting away from wheat and other cereal crops towards, oilseeds (canola and soybean) and pulses. With canola production growth slowing, there will be even more room for pulses (including faba) to increase as plantings of cereals continue to decline. Share of area under main crops in Prairie Provinces, 1991 100% 90% 11% 13% 11% 80% 14% 70% 60% 52% 38% 50% 40% 58% 30% 20% 31% 44% 10% 0% 13% 3% 2% 1% 3% Saskatchewan Alberta Manitoba Pulses Durum wheat Common wheat Other cereals Canola Soybeans Other oilseeds Tubers
Faba bean acreage will continue to grow with pulses Share under different crops Share under different crops 29 There has been a large increase in the production of faba beans. Although the harvest will decline this year due to record plantings and depressed prices in 2015, the longer term potential for growth remains very high. This is the result of area shifting away from wheat and other cereal crops towards, oilseeds (canola and soybean) and pulses. With canola production growth slowing, there will be even more room for pulses (including faba) to increase as plantings of cereals continue to decline. Share of area under main crops in Prairie Provinces, 1991 Share of area under main crops in Prairie Provinces, 2016 100% 100% 90% 80% 11% 13% 11% 14% 90% 80% 27% 24% 14% 70% 70% 38% 60% 52% 60% 23% 37% 50% 50% 58% 40% 40% 17% 28% 29% 30% 20% 10% 0% 31% 44% 13% 3% 2% 1% 3% Saskatchewan Alberta Manitoba Pulses Durum wheat Common wheat Other cereals Canola Soybeans Other oilseeds Tubers 30% 20% 10% 0% 12% 19% 23% 5% 10% 26% 3% Saskatchewan Alberta Manitoba Pulses Durum wheat Common wheat Other cereals Canola Soybeans Other oilseeds Tubers
Advantages of faba beans against other pulses 30 Area under pulse crops in Saskatchewan, Alberta and Manitoba, 2016 1. Tolerates wetter conditions 2. Highest nitrogen fixing crop in Western Canada 3. Adds to moisture storage of soil by retaining snow better than other crops 4. Better standability & harvestability than other pulses 5. Partial resistance to aphanomyces
Conclusions
Conclusions end-use markets 32 Flour: in experimental stages where its incorporation into baking and confectionary products is still being tested Fractionation: hinges on whether faba bean protein can be successfully marketed. Although there are no functional benefits over soy proteins, there are health and environmental factors Feed: potentially huge but price sensitive market for both faba beans and faba bean concentrate Pet food: small market size of 4,500-5,000 tonnes for protein concentrates No one has heard of faba beans and when you google it, the first thing you get are links to favism a disease! Seed breeder We re interested [in faba bean concentrate], but need a reasonable price and volume. Aquafeed producer
Conclusions seed varieties 33 1. Large, tannin beans for domestic new food applications and fractionation, with processing waste sold to ruminant feed market 2. Small, low-tannin varieties in large volumes sold into domestic feed market (at price equivalent to peas)
Acknowledgements 34 21 interviewees in Canada, the UK, Australia and Egypt for generously donating their time Organisers, speakers and participants at the CIGI pulses workshop in Winnipeg in April 2016 for sharing their knowledge and opinions Saskatchewan Pulse Growers & CropSphere 2016
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