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Q&A: Unloading Ugly Lentils And More

In mid-November, I was invited to speak at Agri-Trend’s Farm Forum at Saskatoon attended by nearly 800 of the most forward-thinking, cutting- edge farmers in Western Canada. My task? To review pulse production in Canada and the world and what effect this has on marketing and next year’s cropping plans. Much of the material discussed in the presentation has been covered in previous columns. I’d like, however, to focus on a few of the questions most frequently asked by farmers in relation to this season and looking forward to 2011.

Q.Will the market accept my low-quality lentils?

A.The short answer is yes. Very likely the market will accept the low-quality lentils produced in Canada this year. To elaborate we need to address some details. Canada has had similar harvest seasons, with similar percentages of low-quality lentils, the difference this year is the significant volume of low-quality lentils. For example, this season we have potentially produced 140,000 tonnes of X3s and 140,000 MT of No. 3 lairds. It is not too many years ago that 280,000 tonnes would have been the entire laird lentil crop. I believe over time the market will accept all of this production but it may not happen quickly. Be prepared to talk to many processors and have many samples on hand. Take advantage of the opportunities presented when the market chooses to purchase this quality.

Red lentils again present us with an unprecedented volume of low quality, and we may have produced in the range of a half-million tonnes of X3 or lower red lentils. The market seems to have some interest in these at this time, but be realistic about the prices being offered. Eighteen to 20 cents per pound is very fair considering the world’s and Canada’s production levels. Again talk to as many processors as possible and take opportunities to sell when they exist.

Q.For the purposes of budgeting on my farm, what value should I place on lentils and chickpeas?

A.This is a relatively difficult question to answer, especially at this time of year. Many factors play into this, including volumes of carry-over from our Canadian production as well as volumes produced in the upcoming harvests in other significant growing regions.

I do believe that we can be confident in firm green lentil prices, at least at No. 1 and No. 2 grades, where production volumes are lacking. For the purpose of budget comparisons on our farm, we are using price ideas of 28 cents per pound.

Reds have been a surprise in recent years. Even though rumours of overproduction filled the air this spring, the price has remained firm on seemingly ever-increasing demand. On our farm we are planning on a 25-cent red, though again only for budget comparisons.

Q.What effect will rising durum and canola prices have on lentil acres?

A.Short answer is I believe we will see a 15 per cent reduction in lentil acres (450,000 give or take) in 2011. Why? Using averages, which vary by growing region, if the 28-cent green lentil and 25-cent red lentil prices are accurate, then likely a net return on these is comparable to a $7.50- to $8-per-bushel durum crop and $10-per-bushel canola. Each farmer must analyze and decide what is the best for their rotation and return based on production patterns in their area. Also bear in mind that if Canadian growers are excited about durum, then others around the world will be too and $8 durum can become $6 durum quickly.

My advice most often on this question is this: Grow what you know best and your land grows best. Aim for the largest volume, highest-quality crop of whatever you can and year in year out you will likely be successful.

It is an unfortunate reality that farmers are forced to make choices about what to produce and when to market that production based on incomplete data. Each year is a series of snapshots and moments in time. At no one time will you know what may happen down the road and many events that shape the market are in the future.

What can you do? Make the best decision that you can based on that day’s intelligence. As always use a variety of sources to gather your information. Resist the urge to chase the market. Remember it is a marketing season, not day; view it as such, and rarely will a single decision to sell or not make or break the year. Build a solid plan. Execute the plan with an eye on being opportunistic when the market allows.

JeffJacksonisexportmarketingmanager

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

marketingstrategyquestion?Senditto [email protected] orcall306-757-3005

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