Analysts expect 1.95 million tonnes of Canadian exports this year, down from 2.45 million tonnes shipped last year
Canada’s undersized lentil crop could be getting even smaller, according to analysts.
Marlene Boersch, managing partner of Mercantile Consulting Venture, is currently forecasting a national average yield of 1,045 pounds per acre, 23 percent below the five-year average.
That is slightly above Statistics Canada’s estimate of 1,030 lb. per acre.
However, based on Mercantile’s analysis of early crop yields by district in Saskatchewan, that number could fall as low as 855 lb. per acre.
She is not ready to drop her estimate to that level just yet, but it is a sign there could be further downward revisions in the fall and winter months.
“Chances are that the yields might even be a little bit lower than the averages we’re using,” Boersch told delegates attending the 2021 Pulse and Special Crops Convention.
Fellow panelists Elyce Simpson Fraser, president of Simpson Seeds, and Nathan Buhler, international market manager for Scoular Canada, agreed that the average yield will likely drop a little further in the coming months.
As it stands, Canadian growers are expected to harvest two million tonnes of lentils, down from early-season expectations of 2.6 million tonnes.
That is going to result in a vastly reduced export program considering there was very little carryout from the previous year.
Boersch is forecasting 1.95 million tonnes of Canadian exports, down from 2.45 million tonnes last year. That will leave importers such as India, Turkey, Bangladesh and Egypt vying for available tonnage, which is resulting in the price hikes growers are already witnessing.
Australia is expected to harvest a large crop of 650,000 tonnes of red lentils, but that will be down from last year’s even bigger crop of 800,000 tonnes.
Russia will chip in with 100,000 tonnes of reds and greens, and Kazakhstan will add another 50,000 tonnes.
However, it won’t be enough to compensate for the losses in Canada and the United States. As a result, world trade in lentils will drop by 510,000 tonnes.
Significant price rationing has already occurred, and there is no let-up in sight.
“There is little room to ease prices until next year’s acres become defined,” said Boersch.
“The price outlook is very firm for both types of lentils, and the price peak might come earlier than thought depending on the acreage outlook later this winter.”
Buhler said red lentil prices have already seen highs of 53 to 55 cents per pound in 2021-22.
Prices dropped below 50 cents last week because lentils were approaching the price of competing proteins such as chicken and edible beans, but he expects them to bounce back eventually.
“There is probably room to revisit those highs and maybe slightly higher,” he said.
The same goes for large green lentils, which peaked in the mid-60s.
Simpson Fraser said many growers will be getting crop insurance cheques in November.
“You’re going to have a grower that is cashed up fairly well,” she said.
“I don’t think there is a lot of pressure on a grower to sell.”
Those who do have to generate cash flow have plenty of choices these days with elevated crop prices across the board.
Boersch said there are usually two price peaks for lentils: after harvest and in the May through June period.
The second peak didn’t happen in 2020-21 because supplies were already running out by that time, and it appears that may be the case again this year.
There could be a second peak if growers indicate they won’t be planting enough lentils in 2022. New crop prices are going to have to be very good to draw acres from other crops.
Buhler thinks lentils could gain some acres from canola south of the Trans-Canada Highway in 2022 because canola seed prices are very high, as are fertilizer prices.