Now that the lentil crop is more or less in the bin, where are we at with supplies? My estimate was around 800,000 metric tonnes (MT) or so of production while other analysts were reporting more or less twice as much. I have great respect for the difficulty in assessing the size of the crop any year and more respect for those who form an opinion and have the courage to voice it. While I still cannot come to the same conclusions as other respected colleagues regarding the size of the market I have been influenced by some post-harvest discussions and reports of better yields than I expected in some areas so will revise my production estimate to 1,000,000 MT of production split 60/40 in favour of green lentils.
Even with revised production numbers higher than previous, I stand by my earlier recommendations in regards to marketing the production of green lentils. Buyers the world over were not flush with good-quality green lentils. Yes, we have produced a greater proportion of No. 1 and No. 2 greens than last year but the basic fact is this: if the world wants to buy laird lentils they come to Canada. Your selling decisions in the case of green lentils greatly impacts the price you receive. Western Canadian farmers yield significant influence on price, for better or for worse, based on your selling patterns.
As for reds, I stick with my past opinion to sell. The world has plenty of red lentils both in Canada and other growing regions. With a perceived oversupply no one is eager to purchase red lentils at values growers find exciting. This price has remained relatively stable to maybe slightly firmer. Farmers, reluctance to sell has mildly influenced this price. This would apply even more greatly to greens.
We have seen the grower bids for laird lentils slowly descending over the last few weeks. I am surprised to see this happen. I understand that selling a laird at
28 to 30 cents is more appealing today than selling a red at 18-20. Everyone s situation is different, of course. Needs for storage and cash flow dictate some of what you sell and when. If for whatever reason you feel you need to sell lairds as the market falls then do what you must for your operation. My opinion remains however the more you resist selling greens the greater you can influence the price to climb. So far, enough greens have been coming to the market to not only prevent a price increase but create a negative impact.
As I discussed in the opening there are varying opinions on the size of the crop. If the world perceives there is a large crop they will be more reluctant to buy in volume putting downward pressure on the price. If you can weather what I believe will be a short period of downward pressure (assuming fewer and fewer growers bring lentils to market) then I believe as stated before you can see prices of 30-plus cents for No. 2s and 35 to 36 cents for No. 1s. Ask yourself why someone would be encouraging you to sell as the market falls do they have your best interest in mind?
The current market for reds sits in the 20-cent range. As noted earlier there is what feels like more than enough supply. I believe there is potential upside to perhaps 25 cents but realizing that is not really in control of the grower. Keep in touch with your farm broker or marketing company on a regular basis, perhaps weekly or even more often. Demand may come in short bursts and you want to be poised to take advantage of it when it happens.
Don t panic because prices are softening today. The world needs and wants green lentils, but I am not advocating waiting for a peak of 40 cents. I am saying be thoughtful about the impact selling has on the market and understand why you are a seller today or why you are not. With red lentils be watchful and you will be able to take advantage of surges in the market. Even though the crop is likely a bit larger than I had earlier anticipated that does not mean prices must keep falling you have a say, too.
JeffJacksonismarketingmanager,pulses forScoularCanadabasedatCalgary,Alta. Haveyougotmarketingstrategyquestions? Sendthemto [email protected] The opinionsabovereflectthewriter sandarenot necessarilytheopinionofScoularCanada.
Your selling decisions in the case of green lentils greatly impacts the price you receive