Lentil growers are wondering why they were given the green light to grow reds.
With harvest prices hovering around 10 to 11 cents per pound, farmers wonder why they listened to industry pundits and planted the biggest red lentil crop in Canadian history.
But red lentil promoters say it is too early to judge what is happening and they remain optimistic.
Saskatchewan Pulse Growers, crop breeders and Saskcan Pulse, the largest red lentil splitter in the country, have repeatedly bombarded farmers with the message that 80 percent of the world market for lentils is reds while 80 percent of Canadian production is greens.
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They said producers needed to grow more reds to properly align themselves with global demand and that there was little chance of overproducing the commodity.
Saskcan president Murad Al-Katib assured producers attending Pulse Days 2006 in Saskatoon that red lentil prices would remain in the range of 13 to 17 cents per lb. this year.
Growers responded by planting more reds than ever only to watch prices tumble from13 to 14 cents per lb. last fall.
Kevin Hursh, an agricultural broadcaster and farmer from the Cabri, Sask., area, said red lentil promoters have some explaining to do.
“Saskatchewan Pulse Growers was telling everybody green lentils are a dog, we should be growing a lot more red lentils,” said Hursh.
“Murad was there waving the flag saying the price is likely to be at least 13 cents in the fall.”
He is not the only one pointing an accusing finger. Merv Berscheid, a grain broker with CGF Brokerage and Consulting, has spoken to upset farmers.
“They’re not impressed at all. They’re disappointed, quite frankly. Quite disappointed,” he said.
As harvest progresses, Berscheid thinks nine cents per lb. for red lentils is not out of the question because Canada is “overwhelmed” by red lentil acreage.
But Al-Katib said everybody is jumping the gun. He said it is unfair to make any decisions about prices during the first couple of weeks of harvest.
While prices have slipped due to an unexpected devaluation in the Turkish currency, which has made for cheaper competition, plenty of upside potential remains.
There is good quality crop coming off the combines, strong international demand from places like India, dry conditions in Australia and a weakening Canadian dollar.
“All of these factors lead to a good outlook for red lentils,” he said.
Al-Katib said the Canadian harvest is early and prices likely won’t heat up until September or October when Turkey has taken a substantial bite out of its supplies.
“Growers are getting antsy. My message to growers is patience,” he said.
Growers aren’t the only nervous ones.
Dean Corbett, chair of Saskatchewan Pulse Growers is worried about ramifications the price dip will have if it is sustained beyond a harvest anomaly.
“I think there is lots of farmers out there that are going to say, ‘Why would I run my equipment on the ground and beat everything up for 10 cent lentils.'”
That could hurt an association funded by check-off dollars.
“If people give up on growing lentils in this province because they become a commodity like wheat, it’s definitely going to impact on our total operation, there is no question about that,” said Corbett.
He said the association may have been given some bad advice.
“It’s disappointing because we were led to believe that if you increase acres don’t worry, we’ll find markets for them.
“Maybe we have markets for them but maybe the markets aren’t willing to pay the prices.”
Some people are already calling for a contraction of acres. Berscheid said production has grown too fast and there is only one solution.
“The job of the market in 2007-08 is to discourage red lentil acreage and that’s what is going to happen because the prices won’t be there.”
Al-Katib said if prices are 10 cents per lb. in March that might be a valid discussion, but he said it is unfair to start talking contraction during the first few weeks of harvest.
He is confident this year will turn out to be the founding block of a sustainable red lentil industry.
