The Push and Pull of Pulses, CGI Barrels Ahead
It must have been fate because all that the 20-year-old Jeff VanPevenage wanted to do was trade wheat. While finishing his senior year of college at Washington State University, VanPevenage started with Columbia Grain International (CGI), LLC.
Shortly thereafter, he transferred to Great Falls, Montana, where he spent six years trading durum, oats, and barley.
“I was a wheat trader,” VanPevenage said. “I didn’t want anything to do with peas and lentils.”
However, VanPevenage didn’t fight the Northwest region’s movement toward growing more pulses.
“In the early- and mid-2000s, pulses were really taking hold with farmers in the Northern Plains, and they needed somewhere to go with their product,” he said. “At that point, I took notice and got on board.”
While farmers in the Palouse region of the U.S. have had a long history with pulse and lentil crops — they’ve been grown in the region since 1916 — these were relatively new crops for those in the Northern Plains.
Here, farmers found that they went well with the established crop rotation, and by 2009, North Dakota had become the largest producer of pulse crops with Montana closely following, according to the USA Dry Pea and Lentil Council and the American Pulse Association.
In 2005, VanPevenage started the Montana Pulse business for CGI, and in 2006, he became head of the pulse business for the entire company. Today, he’s president and CEO of CGI and resides in Portland, Oregon.
While all the rage the past year has been on plant-based proteins, primarily with the “meatless burgers” such as the Impossible Burger and Beyond Burger, the market boom is so much more.
That’s just surface-level, shared VanPevenage. If you look below the surface, there’s this whole rip current.
“For decades, wars have displaced people,” he said. “When these refugees moved, they didn’t leave their food and diet behind.”
“They took it with them and soon, they were sharing it with neighbors. Before long, groceries and restaurants began catering to the purchasing desires of these immigrant populations. Demand has perked up around the world, and …
“COVID-19 will only push this forward. You’ve seen store shelves across the United States and Europe wiped clean of non-perishable items, such as dry beans, peas, lentils, and other goods that have a long shelf-life, that are nutritious and easy to cook.”
Dario Bard of the Global Pulse Confederation said consumers across the globe have been stocking up on feed essentials, including pulses, as governments instituted lockdown measures.
Nielsen data for the week ending March 14 showed U.S. retail sales spiked 230 percent for dry beans and 157 percent for chickpeas. These numbers and their effect aren’t limited to the United States. Bard reported dry bean demand for one of Canada’s largest supermarket suppliers was up by 500 percent to 1,000 percent. In Australia, export prices on chickpeas (garbanzo), fava beans, lentils, and mung beans jumped by $50 to $150 as international buyers sought to ramp up inventory.
VanPevenage adds that governments around the world have mandates to import more product, and to maintain larger stockpiles within the country.
Before COVID-19, plant-based protein sales witnessed compound annual growth rates (CAGR) anywhere from 5.27 percent in Europe and Russia to 8.10 percent in North America and Mexico, from 2013 to 2018, according to “The State of the Global Plant-based Protein Market” report published by Kerry. Analysts forecast slightly lower but favorable CAGR numbers through 2023, with a low of 3.77 percent and a high of 5.65percent.
Under the rising tide, CGI has been investing in high-quality processing facilities (nine in total), where these crops are cleaned, bagged, and distributed the world over. Moreover, the company operates an integrated system of assets and joint ventures which include interior elevators, processing plants, agronomy centers, barge loading facilities, and high capacity, state-of-the-art export terminals.
Scouting the Next Wave
“We are a large originator of product,” VanPevenage said. “We want to continue our growth in the supply chain, and that puts us into the ingredient market. We want to get to the point where we are supplying that ingredient either to the food manufacturer or to the consumer.”
“Have we gone so far as to jump into protein isolates (think protein powders)? Not yet, but we are going to.”
Previously dominated by animal proteins and soya, the protein ingredient market is rapidly expanding as new extrusion technologies make it easier to control product textures, giving a more favorable sensory experience.
“A lot of investment and research has gone into taste, and that’s something I’ve been very impressed with,” VanPevenage said.
In fact, Montana Specialty Mills, a joint venture between CGI and Evans Grain, recently completed the relocation of its processing center to Great Falls, Montana. This new $20-million, 20-acre facility uses state-of-the-art grain processing equipment dedicated to making non-GMO products and organic oilseeds. This move enables the company to expand in non-GMO, organic vegetable oils and protein meal markets. With the completion of this, CGI now looks to build a protein plant here in the United States.
One of the other specialties VanPevenage has his eye on is creating specialty flours, including a gluten-free flour. Pulses are gluten-free.
“There’s not a lot of concentration put on a good gluten-free flour,” he said. “We want to create a great gluten-free flour for the food-service industry and are looking at building a flour mill that will result in an overall better flour.”
VanPevenage believes these moves deeper into the supply chain will attract more capital.
“If you look at the sales of plant-based ‘meats,’ sales initially spiked, then they leveled off and they spiked again here in the past month given the COVID environment with beef shortages and processing plants down,” he shared. “I think this will only continue to become more a part of people’s regular diets.”
However, VanPevenage doesn’t think plant proteins will displace demand for beef or other animal proteins but is an alternative product that can complement their diet.
“With the growing global population, increased demand for protein and a focus on sustainability, this is not a ‘flash in the pan.’”
In fact, he shared that many of these pulses are making large end roads in helping feed animals, from our beloved pets to cattle for beef.
The saying “one man’s trash is another man’s treasure” rings true.
VanPevenage recalled six and seven years ago with production of 180,000 tons in the United States to be processed, it was difficult to find places to go with your “chips and splits.” Much of this we would move into India for $260 to $270 a ton, he said.
“Four years ago, when chickpeas were trading for $2,000 a ton, we were selling our chips and splits into the pet food industry at $1,400 a ton, and this is our byproduct,” he noted. “When you’re cleaning peas and lentils and all the culls that come from it, there’s a market for it because of the protein.”
There’s an increasing trend of pet owners moving toward non-grain pet foods. People love their pets and are willing to invest in them. As such, it’s no surprise that key trends in pet food processing mirror trends in human food: clean label, alternative proteins and more healthful ingredients and processes, according to an article on pet food trends in 2020 published in Food Processing.
In 2019 alone, Americans spent approximately $36.9 billion on pet food and that’s expected to increase in 2020, according to Statista research.
“Today’s widespread use of pulses in pet foods can be traced back to the 1990s, when some manufacturers were seeking ways to differentiate their brands and products by launching grain-free products containing alternative sources of carbohydrates and proteins,” says Gary Davenport, Archer Daniels Midland Company companion animal technical manager in Chicago, Illinois. “Pulses were a natural fit for these new foods due to their carbohydrate and protein composition.”
Once considered a filler, they were economic replacements for meat and poultry, as they contained a favorable nutritional profile. Today, pulses are recognized as sustainable crops that provide a desirable balance of macro- and micro-nutrients.
“The current proliferation of grain-free products reflects the continued consumer demand for these products,” Davenport says.
Pulse protein also powers beef production.
VanPevenage also said he’s seeing private cattle companies make the move to more peas and lentils. This has been a huge boom to the industry, he said.
In areas of significant pulse production, primarily the northern Great Plains and the prairies of Canada, beef producers have a high-quality option for protein in their feed rations.
And the proof is in the pulse, according to research by North Dakota State University Extension. In a study of 176 mixed-breed steers from 40 different ranches in North Dakota and Montana, those cattle fed chickpea-, field pea- or lentil-based diets during the first 20-day period gained 25.9 percent faster and consumed more dry matter per day compared to cattle fed the corn-canola-based diet. This research also indicated that protein from pulse grain might be more palatable or digestible compared to protein from canola or corn. You can read more on the study here.
No matter the angle, CGI has a solid vantage point in the world of pulses, plant-based proteins and rising up to the global challenge of feeding a growing population in a more sustainable way.
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- Julie Deering is senior content manager for HighQuest Group's Agribusiness Division, working on the Women in Agribusiness, Oilseed & Grain News, and Organic and Non-GMO platforms. She also owns a cow-calf operation in the heart of Missouri. Connect with her on LinkedIn at linkedin.com/in/judouglas.