LANGHAM, Sask. — Despite extremely high prices, the world’s green lentil buyers keep beating a path to the Prairies’ door.
But a marketer warns that Canadian quality can only push prices so high before cash-strapped processors and consumers switch to lower quality and different crops.
“The Canadian farmer has the expectation of values only going one way, to that top-right corner (of the price chart,)” said Peter Gorski of BroadGrain in an interview at Ag in Motion.
“The people that they sell to sit at the bottom of the socio-economic scale.”
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Laird and Eston lentils have recently been selling for 50 cents per pound. That’s a great price for a Canadian farmer, as long as they have a decent yield, and it’s reasonable compensation for drought-reduced yields.
But for buyers in many developing nations, who are the chief consumers of exported lentils, that’s a price that slashes into the average consumer’s food dollar, which is a much bigger part of people’s family budgets than in Canada.
“Once we see values get to a certain level, like we’re seeing with Lairds and Estons, it creates market destruction,” said Gorski, who entertained a continuous stream of farmers approaching his booth interested in his take on special crop markets.
“We would hate to see Canada lose that business.”
Gorski believes Canada’s market edge is its high quality and good standards, so that can’t be compromised. But green lentil buyers can go only so far with prices.
Because of the extremes, growers in Ukraine, Russia and Kazakhstan are keen to get into the market. That is more difficult now because of the Russian invasion of Ukraine, but eventually farmers there can see good returns if they can replace Canada in some markets.
Those countries couldn’t compete with Canada on quality a decade ago, but that might not last forever.
“They’re getting closer and closer every day,” said Gorski.
Red lentils are an almost separate market these days, being sold to different buyers in different places and trading mostly as a bulk commodity rather than a special crop.
The marketing season began with prices around 30 cents per lb., but western Canadian dryness has seen that rise to 32 to 35 cents.
“That’s a very strong value for Canadian growers, but a very expensive value on the international side,” said Gorski, calling it the highest price on the global market right now.
“Canada, even with that premium, is still sought after.”
Buyers in Turkey, the Middle East and North Africa value Canadian red lentil quality so they’re still buying, but Gorski cautions that the same dynamics that are killing demand for green lentils will apply at some point to red lentils.
