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A run of bad luck has left the pulse crop market cold, and as a result Pardue Grain has laid off 14 workers from its $7.2 million facility 12 miles west of Cut Bank, according to Roger Sammons.

But, Sammons emphasized, the layoffs are temporary and the facility itself is not closing for good.

Several factors have combined to lead to the softening pulse market and ultimately the layoffs. First, Chinese and Indian tariffs mean that that those countries are importing fewer pulses. 

The United States Department of Agriculture’s Foreign Agriculture Service reported on May 17 that China had announced supplementary import tariffs on several U.S. products, including pulse crops.

India, with a large percentage of its Hindu population vegetarian for religious reasons, relies heavily on pulses for a source of protein. That country has enjoyed a bumper pulse crop, meaning even without the current trade spat, it would not be importing as many lentils, beans and peas.

And, Sammons said, one of his biggest customers, JM Grain, Inc., filed for Chapter 11 bankruptcy in June.

“That and the tariffs have really hurt our business,” Sammons said.

“Seventy percent of the pulse crops grown in Montana are exported and when there’s that much of the product that’s not being able to move, obviously it creates quite a glut in supply,” Sammons continued.

Sammons has heard similar stories from other processing facilities. 

“All my competitors I’ve talked to are running at about half or less capacity and they’re more fully integrated with contracts. They have a little built-in business,” he said.

Pardue, which is still in its startup phase, is dependent on producers who do not have contracts for their crops.

As the market for pulse crops has grown, Montana producers have led the way in production of lentils, peas, and chickpeas. 

According to data from the United States Department of Agriculture’s report “Montana Agricultural Statistics 2018,” Montana led the country in lentil and chickpea production and was second in dry pea production in 2017, the most recent year for which data is available. While Montana’s bread and butter is still in crops such as barley and wheat, pulses have been growing in popularity over the past several years.

But there is evidence that is starting to slow down. Montana producers seeded about 15 percent less acreage in pulses this year, said Weston Merrill, marketing officer with the Montana Department of Agriculture. 

That figure does not tell the whole story, however, because many farmers plant pulses for both “agronomic as well as the economic,” Merrill said. 

Besides being able to sell pulses, producers like planting them because they fix nitrogen into the soil where they are planted, providing a more nitrogen-rich environment for the crop that will be planted in that field the year after. 

With a softening market, the constant quest of producers and the Montana Department of Agriculture to find emerging pulse markets has more urgency. Merrill recently returned from a USDA trade mission to Colombia, a country that is already importing Montana agricultural products. Cultivating emerging markets is important to continued trade success, he said.

Domestic marketing campaigns aimed at “flexitarians” – people who eat meat but are looking for additional ways to incorporate protein into their diets – are becoming more prevalent. And pet food manufacturers often use dry yellow peas in their products, Merrill said.

The work of research into pulse growing, development of new markets and the work of the Montana Pulse Crop Committee is funded through checkoff dollars collected when producers sell their crop. 

While the work to cultivate new markets continues, in the short-term Sammons says he has a few contracts coming up in the next few weeks, which will put some of his crew back to work. 

The tariffs had been affecting the market since last fall, but the bankruptcy of JM Grain “left us holding the bag for a bunch of money and for a startup business, that’s difficult to overcome.”

Pardue Grain is listed as one of JM Grain’s creditors in court filings in North Dakota Bankruptcy Court.

Sammons is confident the market for pulses will come back; it’s just a question of when. As far as he’s concerned, everyone he has had to lay off has a job when that market comes back. They are currently on unemployment.

“Hopefully when we do fire up again, they’ll still be available,” he said. 

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