Demand for Prairie red lentils picks up

Demand for Canadian red lentils has picked up recently, with the increase in business helping stimulate strength in the cash bids for the commodity.

Cash bids for red lentils have climbed to around the 23- to 25-cent per pound area, depending on the region of the Prairies, confirmed Jackie Kress, senior grain buyer for Legumex-Walker.

The roughly three-cent jump in a very short period was in response to red lentil tenders from India’s subcontinent, she said.

“The tenders helped to inflate the bids for red lentils,” she acknowledged, but added that as quick as the bids rose, they may also disappear just as fast once the business has been covered.

“To tell you the truth, we felt the increase was a bit unrealistic,” Kress said.

While the jump in values is certainly encouraging to farmers, the stronger bids were not likely to have all that much of an impact on seeding decisions this spring, she said.

“With the producers we have been talking to, the ones who had red lentils in their crop rotation plans will follow through with those intentions,” she said.

Kress acknowledged a lot of competition among the various crops in terms of what will be seeded this spring.

As an example, Kress said, based on her understanding, farmers have already been busy forward-contracting barley acreage, with the signing including an ‘Act of God’ clause that had previously not existed.

“I had never heard of barley having an ‘Act of God’ clause,” Kress said, adding this was an example of the changes that have occurred since the removal of the Canadian Wheat Board’s monopoly powers.

Farmers are now looking at seeding plans with the intention of pulling in viable cash crops, she said.

“Red lentils have traditionally been a high-yielding, high-return crop and acreage should be fairly stable this spring,” Kress speculated. Weather conditions at planting time will ultimately decide how many red lentils go in the ground.

The bulk of the crop is grown in Saskatchewan, with red lentils not necessarily fond of overly wet conditions, she said.

She also acknowledged there has been some forward-contracting of red lentils by farmers, with new-crop bids now in the 20- to 21-cent per pound area for No.2 or better red lentils.

Red lentil acreage in Western Canada for 2013 was estimated at 1.038 million acres, according to Bobby Morgan, a pulse analyst with Agriculture and Agri-Food Canada. In the spring of 2012, 951,000 acres were seeded to red lentils.

Morgan attributed the rise in red lentil area to the jump in values and anticipated steady demand from the Indian subcontinent.

— Dwayne Klassen writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.