Lentil prices have been steady to lower across Western Canada for about the last month, thanks to a lack of global demand for Canadian product.
Darren Lemieux of Simpson Seeds at Moose Jaw, Sask., said a number of usual buyers are busy producing their own crops, and consequently are not in the market.
“The world’s demand is fairly slow at this time,” Lemieux said. “We are looking at a few areas of the world where the new crop is about to come off, like India right now, and Turkey in late May, so their demands are dwindling.
“Also, Iran is going through their New Year, where they shut down buying until the New Year is complete,” he said. “They probably won’t be back in the market until around May.”
Adding to Canada’s export woes is some business that was lost due to the late harvest last fall.
“A percentage of our normal demand was lost to U.S. Richleas due to our late harvest, and some areas that would normally buy our Laird lentils bought Richleas because they were cheaper and available,” Lemieux said.
The Canadian dollar, which has been trading above parity with its U.S. counterpart throughout the first quarter of 2011, has also put a downward trend on lentil values, he said.
“The Canadian dollar is not helping the market either, and with the political turmoil across the world, buyers don’t have the opportunity to come out and purchase,” he said.
The lower prices could cause lentils to see a decline in acres this spring, as well as the wet soil conditions and flood potential across many parts of Saskatchewan and Manitoba.
“It’s (the wet conditions) on the forefront of everyone’s mind, with the heavy snowpack and slow melt. If we have a nice spring, it may not be that bad, but if we get any type of precipitation, it will definitely cause problems,” Lemieux said.
“There could be a shift to other crops this spring, because of crop rotations, and of course profitability of other crops.”
Lentils prefer dry conditions as opposed to the wet ones expected in many growing areas, he said.
Current elevator deliveries for Laird lentils are bringing as much as 38.5 cents per pound, while Richlea lentils are bringing as much as 31 cents and crimson lentils 21 cents, according to Prairie Ag Hotwire. These prices are anywhere from two to 4.5 cents per pound lower than one month ago.