WINNIPEG (CNS Canada) – After years of Western Canadian farmers rushing to lock in pulse crop contracts during the spring, this year that hasn’t been the case.
“Normally I would say that I’d have my plant booked to December and I don’t have a single thing booked this year. But does that mean we’re not going to sell anything? No, it just means it’s going to be done differently,” said David Newman of Commodious Trading near Victoria, B.C. Commodious has a processing facility in Weyburn, Sask.
Following a North American winter where India increased import tariffs on numerous pulse crops (lentils, peas, chickpeas) the pulse market has slowed and prices have dropped. Traders, like Newman, haven’t sold as many or as big of pulse shipments and heading into spring planting it doesn’t look like things are going to change.
At Commodious, Newman said, policies have changed in the office. In years past they would publically market their prices, but they have now switched to word of mouth deals.
“Just taking the opportunities as they come up, make the best choices you can and go on to the next week, or next month and not really worrying about it,” Newman said.
This strategy is similar to farmer sentiment. In previous years there would be a panic if contracts hadn’t already been signed for pulse crops, but farmers are now taking a more wait and see approach.
In Australia, farmers are taking a similar approach to handling the Indian tariffs. Traditionally India was a major importer of Australian chickpeas. In a March 21 story on Grain Central, industry professionals warned farmers should change their marketing strategy.
The article by Henry Wells stated Australian chickpea growers will now have to market their crop throughout the calendar year and beyond. Farmers should also be prepared to store pulses and sell on price spikes, the same as they do for cereal crops.
The logic is similar to what Newman sees happening in Canada, there aren’t any incentives for farmers to pre-book as prices are low. Buyers also aren’t looking to buy ahead of time, as international markets aren’t clamoring to fill orders.
“People think there’s going to be product. People think there’s going to be demand, but it just hasn’t lined up like it has in years past,” he said.
Newman also doesn’t expect to see a huge change in Prairie acres planted. Farmers he talks to are saying they can’t stray too far from their crop rotations or they’ll risk disease in their soil.
“(Farmers) can tweak a little. But it’s not like everyone’s just going to (make rash decisions and) now all of the sudden we have zero lentils and four million acres of soybeans or something,” he said.
The current pulse crop market is similar to when Newman first started in the industry. In the early 2000’s business was day to day and prices weren’t very high.
“(It’s) just kind of everyone running at cost. Everyone struggling to (get through the year and) figuring how to make it work,” Newman said.