Lentils have paid a lot of bills for 2009-10 and put many farmers in strong cash positions. Prices in mid-January were around 38 cents a pound for No. 1 reds and 37 cents for top-grade greens, which has growers primed for continued growth. Panelists in the lentil outlook discussion at the Saskatchewan Pulse Growers meeting at Crop Week in January pegged Canadian 2010 lentil acres at 3.0 to 3.1 million, up from 2.3 million or so in 2009.
That will likely bring a dramatic drop in prices. Panelist Brian Clancy, president of STAT Publishing in Surrey, B. C., said the probability of top-grade green lentils dropping below 20 cents in 2010 is 60 per cent, while the probability of red lentils dropping below the same threshold is 40 per cent. But then he qualified his prediction: “Every year we think the era of expansion is over, and every year we’re surprised.”
Heidi Dutton of Western Grain Trade Ltd. in Saskatoon noted that even with lentil prices as high as they are, exports are at a blistering pace. Canada exported 220,000 to 250,000 tonnes in October 2009, far and away the best month ever, and followed that up with 200,000 or so in November. Clancy agreed that even with the large crop in 2009, carryout heading into 2010-11 will be lower than expected.
India is the key market, but Dutton reminded growers to also watch what happens with harvests in Syria and Turkey over the next three or four months.
India’s rain situation is OK and its crop looks good. Turkey has normal output forecast for its harvest this spring, which is an improvement over last year, she said. If that proves true, that will likely reduce prices by March or April.
Martin Chidwick, senior vice-president Canada for Bissma Pacific, remains bullish about lentils, and reds in particular. He sees lots of opportunity to grow and evolve lentil consumption globally. That said, his contract offer for 2010 is current in the low 20s for all lentils. A contract offer of 25 cents is “not forthcoming,” he said, “but I don’t see any reason to be below 20 cents.”
With so much time between now and harvest and with current prices so high above norms, these contract offers didn’t seem to surprise anyone at the meeting.
Dutton remains strong on lentils as a leading prospect for 2010. Returns are double wheat and durum, she said, adding, “With lentils grossing over $700 per acre, why are you going after $7 peas?”
Jay Whetter is the editor of Grainews