Pulse weekly outlook: Low prices change growers’ marketing tack

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 operates a processing facility at Weyburn, Sask.

Following a North American winter in which India increased import tariffs on numerous pulse crops (lentils, peas, chickpeas), the pulse market has slowed and prices have dropped.

Traders such as Newman haven’t sold as many pulse shipments, nor as big, and heading into spring planting it doesn’t look like the situation is going to change.

At Commodious, Newman said, policies have changed in the office. In years past they would publicly market their prices, but 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 more of a wait-and-see approach.

In Australia, farmers are taking a similar approach to India’s 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, 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 clamouring 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 to whom he talks 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 2000s, 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.

— Ashley Robinson writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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Ashley Robinson - MarketsFarm

Ashley Robinson writes for MarketsFarm specializing in grain and commodity market reporting.

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