FarmShift Rising Stars - Lentils

July 9, 2017 (Winnipeg, MB) – FarmShift: Lentils 2017 Syndicated Report Now Available for Purchase

Lentils are on a remarkable trajectory in western Canada, increasing from 1.4 million acres 10 years ago to last year’s record acreage of almost 6 million acres. Growers planned a decrease this year, with Statistics Canada (June 29, 2017) estimate at 4.4 million acres, still exceeding the 2015 level which was also a 10-year record.

FarmShift Rising Stars – Lentils is a syndicated quantitative survey conducted in March 2017, exploring grower perspectives on future lentil acres and adoption, decision drivers, disease and crop quality management, satisfaction with contracting options, and perceptions of market opportunity and pricing thresholds.

The study examined drivers of the long-term increase in acres, what might drive future growth from current lentil growers, as well as adoption among non-lentil growers in main and fringe lentil regions.

The study showed that among current lentil growers, there is a substantial core who grow lentils every year, as well as a significant segment who have moved in and out of lentils over the past five years. For lentil growers and non-growers, the financial opportunity is a large part of the decision to grow lentils or increase/decrease acres, driven by perceived market opportunity and pricing levels.

The study sought to define threshold pricing levels for red and green lentils. At what price do growers begin to question whether or not to grow lentils, and at what price would they be looking to rearrange their crops to put more lentils down? When it comes to commodity price levels that will motivate growers to increase lentil acres, 32 cents per pound seems to be a tipping point for red lentils, and 35 cents for green lentils. At the time the research was conducted, 2017 contract bids were around 25 cents for red lentils and 35 for green.

The lines on the following chart illustrate this elasticity. The report provides detail on these pricing levels.

Long term, there is strong upward potential from existing lentil growers, with existing growers saying that they could conceivably plant about one-third more acres than they currently grow (given the right conditions). Among non-growers (in lentil and fringe areas), three-quarters say they would be likely to grow lentils in the future, if there were varieties that were suited to their farm’s growing conditions.

The report covers these topics and many more.

A concurrent study was run on soybeans. For more information about these studies and to purchase the report(s), please click here for the study prospectus.

Director of Research Strategy

Russell Jeffrey
Managing Partner