Issue link: https://www.e-digitaleditions.com/i/958929
35 farm406 These policy changes leave the North American pulse markets in a precarious place. Lentil and pea prices have already weakened, likely reflecting the short-term reduction in demand for this year's crop. However, conditions in 2018 are likely to largely depend on whether and when India reduces or lifts the import tariffs. The most recent Agricultural and Agri-Food Canada projections (which did not account for the most recent tariff on lentils and chickpeas) indicate that the stocks- to-use ratio for 2017/18 are forecasted to increase by over six times, with associated price decreases of 13–20% relative to 2016/17. Similarly, lentil stocks-to-use ratio is projected to nearly double and prices to decrease by 7–13%. Because Canada is one of the world's largest producers and exporters of pulse crops, conditions in Canadian pulse markets are highly indicative of the overall trends in U.S. markets as well. Despite these projections, an interesting and largely unknown dynamic will be farm operators' planting decisions in spring 2018. One indicator that has been repeatedly shown to affect farm production and land allocation decisions is the relative price ratio of two competing crops. For example, in the major pulse production areas of the northern Great Plains, farm businesses are likely to consider the relationship among the prices of hard red spring wheat (HRS), lentils, and peas. As of early-2018, the continued strength of spring wheat prices relative to both lentils and peas has reduced the pea-to-HRS and lentil-to-HRS ratios relative to the previous several years. This indicates that market value of spring wheat has increased relative to pulse crops, and the falling lentil-to-pea ratio suggests that increasing value of peas relative to lentils. One important caveat, of course, is that there is still time before farm operators have to commit to a planting decision. Much can change during this period, which could significantly alter market dynamics. As such, aggressively following these dynamics and assessing economic indicators can aid in making insightful production and management decisions and maintaining some degree of stability in these uncertain times. Figure 2 Notes: Data are from the USDA Agricultural Marketing Service. Figure constructed by author.