A Marketing Plan For Ugly And Uglier Lentils

MARKET INTELLIGENCE

Success hinges not on just a plan or strategy, but our ability to execute that plan. For example, if you need a single point to win a football game you have a few options: kick a field goal (if you’re close enough), attempt to score with the ball in the end zone, or try something completely different and punt for a single point. Different circumstances call for different plans; each strategy can end up right or wrong (though kicking for a single is likely wrong), but you won’t know until you put your plan into action.

Marketing success is no different. In the face of such a broad range of pulse quality — from No. 1, to extra three, to, well, ugly — what’s the right strategy?

GOOD QUALITY

Top-quality lentils are scarce. As already indicated by farmer bids and farmer selling habits, marketers, international buyers and farmers holding good-quality lentils realize they have something of value with upside potential. I will repeat what I have said in the past, it is not unrealistic to be greedy in the case of green lentils of good quality. The price has already exceeded 40 cents this season for top quality lairds. In my opinion, there is little to zero upside at those levels and farmers should seriously consider these offers. At prices north of 40 cents we can stifle demand and price ourselves out of the market.

Good-quality reds are a different

What’s The Word On Kabuli Chickpea Quality?

From discussions with processors and farmers it appears that most of the kabulis this season have been unable to fully mature and have, in many cases, 20 to 30 per cent green kernels.

The good news is from the samples I have seen, the wet weather did not harm the quality of the mature kernels in a significant way. Combine that with the fact that Canada has few kabulis as carry-over, and most other origins had smaller production, and you will likely see positive values that make colour sorting to remove the green kernels a viable option.

Kabuli prices have been firming and will likely remain firm through the fall and early winter. Again, be realistic about your production and the additional work it will take to make your production salable. Most of the production will be able to be sold as No. 2 or better, but will need some help getting there (like with the use of a colour sorter), and there is a cost associated with that. Don’t be offended that your processor and marketer want to make a profit, too.

story. We have seen a decline on values in recent days. Why? There’s larger-than-expected production in Turkey and Canada and it looks like Australia will have decent volumes as well. Those who need to purchase top quality have origins other than Canada this season. In addition, the less expensive lower-quality reds have arrived to the market easing demand pressue and value.

LOWER AND LOWEST QUALITY

We’re in unchartered waters this year when it comes to the sheer volume of poor-quality lentils in Canada. In other poor years, the majority of low-quality lentils still got moved. It seems the market will take just about any lentil but at a heavy discounted price. With the significant volumes of extra three, three and potentially worse lentils of both red and green, it will be interesting to watch and see how the market reacts and what prices will do. I anticipate greater-than-typical spreads between No. 2 and extra three lentils.

THE STRATEGY

Given what’s in front of us, then, should we kick a field goal, punt a single, go for six points?

Every farm’s needs are different, yes, but, if possible, I’d recommend that you slowly release your top-quality green lentils to the market and see how it reacts. Don’t be afraid to reject the first offer received and make your marketing company work for your best-quality lentils.

If you were fortunate enough to have harvested good-quality reds and you have not yet marketed them, you may have missed the best price of the season. That said, there could be some spring and summer demand depending on growing conditions here and elsewhere so watch for that. Another thought might be to hold on to quality and marketing it as seed for 2011. Many farmers may not have harvested either red or greens suitable for seed. There may be value there.

Low-quality lentils have the potential to be difficult, it’s true. Will there be enough market for all our low-quality production? Likely, but like I have said this is an unprecedented situation. As is always my belief when it comes to low quality, be interested in selling when the market is interested in buying — there may not always be opportunities to move low-and lower-quality pulses when you are in the mood to sell. Be realistic about what you have and about the volumes of low quality available. Another key, and this is especially important with the lower qualities, is to keep accurate samples of your production. You are taking one kilogram to your buyer and selling 50, 100 or 300 tonnes based on this; the more representative your sample the easier your transaction with the purchaser will go.

In my opinion never punt for a single when you can kick a field goal for the win. That being said, any strategy well executed has the chance to win. Examine your operation and assess your needs. Develop your strategy then act on it. In a year with many challenges, haphazard marketing is not the answer.

JeffJacksonisexportmarketingmanager

withWigmoreFarms( www.wigmorefarms.com) basedatRegina,Sask.Haveyougota

pulsemarketingquestion?Sendthemto [email protected] orcall306-757-3005

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