Lentil acres expected to drop 20 percent

Supply exceeds demand


Brian Clancey is first out of the gate with a 2013 pulse acreage estimate, forecasting a dramatic decline in lentils and a modest increase in peas.


The Stat Publishing analyst sees 1.9 million acres of lentils, which would be 20 percent smaller than the 2012 crop and well below the high of 3.48 million acres achieved in 2010.


He thinks the 20 percent decline might be a conservative estimate.


“The lentil acreage will probably be lower than that. That’s the way it feels,” said Clancey.


It would be the smallest lentil crop since 2008 when growers planted 1.75 million acres.


“We hopelessly overproduced lentils in 2010, 2011 and probably again in 2012. So acreage has to come down,” he said.


The overproduction problem was exacerbated by a poor quality crop in 2010.Prices would have been around 12 cents a pound if it had all been No. 2 or better. However, top quality reds were fetching twice that amount during the winter.


“Because of the disaster that we had that year, the top-end lentils, the No. 2s and No. 1s, were worth a fortune. The bottom-end stuff was heavily discounted,” said Clancey.


“That misinformed producers as to the status of the whole lentil situation.”


Growers planted 910,000 fewer lentil acres in 2011, but that wasn’t a deep enough cut. Total supply increased because of high carryout of low quality product from 2010.


Analysts were expecting plantings to drop below two million acres this year, but again the price signal at seeding was too high and farmers seeded 2.4 million acres.


“It was way higher than anyone expected and that has resulted in a further deterioration or erosion in prices,” said Clancey.


However, he believes competition from wheat will finally knock lentils below the two million acre mark next year. Gross returns from lentils are expected to be two percent below wheat after returning an average of 26 percent more than wheat over the past decade.


Lentils are also expected to face stiffer competition from wheat in the open market because farmers now view wheat as a cash crop like pulses.


Red lentil acreage isn’t expected to fall as much as greens because reds have had the more aggressive export program early this crop year.


Peas are generating a seven percent better gross return per acre than wheat this season, but the crop is still underperforming canola.


When Clancey put it all in the grinder he came out with a forecast for 3.44 million acres of peas in 2013, which is a six percent increase over last year.


“The other thing that peas have going for them is movement has been really good,” he said.


Clancey thinks the proportion of land sown to green peas relative to yellow peas will rise because green peas are selling at a “monster premium” to yellows. 


He said peas are more resilient than lentils because they can be sold into a wide variety of markets, including livestock feed markets.


“Every time the price comes down because of oversupply, we discover a new way to use peas. When we come out of that our market is bigger,” he said.


“Peas could be corn. They’re just that versatile. The only thing is peas don’t have oil.”


Clancey issued his acreage forecasts Oct. 28. He said circumstances may well change by February and March when farmers are making their final seeding decisions, de-pending on what happens with pea and lentil markets.