Currency, Ethanol Figure in Feed Peas

VANCOUVER - Mar 3/06 - SNS -- Currency was a significant factor in the world's feed pea markets during the past week, with strength in the Canadian dollar and Euro affecting those regional markets.

The Canadian dollar reached highs not seen for 14 years during the week and all futures delivery contracts traded on the Chicago Mercantile Exchange posted life of contract highs during the week. With peas needing to maintain prices which are competitive with those for major feed ingredients, this is troubling news for Canadian growers are looking at a tangible decline in average bid levels in 2006-07 just because of currency.

Feed ingredient markets are also grappling with rapid development of the ethanol industry in the United States and continued expansion of Europe's biofuel industry. Ethanol will be a significant new demand factor in the coming marketing year and one which should increase in importance through at least 2010.

The good news is this takes corn off the market, creating opportunities for alternative livestock feed ingredients such as peas. The bad news is one of the byproducts of ethanol is distillers dried grains (DDG's from dry mills).

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