Organic wheat, lentils in for price lull

Heap of green lentil on white background With a massive green lentil crop predicted and plenty still in the bin from 2017, prices are expected to fall. Photo: peekeedee/iStock/Getty Images

By Terry Fries
Commodity News Service Canada 

Farmers growing organic wheat will likely have to accept the crop’s best prices are behind it, at least for the near future.

Prices for organic, large-green lentils are also likely to struggle, said Jason Freeman, general manager of Farmer Direct Co-op in Regina.

“Coming into the new crop year though, it looks like it’s going to be a massive crop and there’s still product in the bin. So, we think prices are going to be significantly less for things such as large green lentils, even wheat.”

While it’s early to predict new crop pricing with certainty because weather, the upcoming harvest and buyer demand will ultimately affect prices down the road, Freeman said he expected large green lentils to be around 80 to 90 cents per pound. That’s off from about C$1 per lb.

“This year it looks like it’s going to be a monster crop in some areas and there’s still large green lentils in the bin.”

He said 30,000 bushels of large greens is still sitting on farms, which is a lot for a small crop like lentils.

Organic milling wheat prices are falling too, at about C$17-C$18 for hard red spring wheat and $12-$13 for soft white.

“The price is really, really bad on that stuff right now,” said Tristan Gill a trader at Westaqua Commodity Group in Vancouver.

I think there’s going to be a lot of wheat in the market and a lot of good wheat. – Tristan Gill

He said most buyers have their needs covered off until the new crop comes in, and few, if any contracts for new crop are being offered.

He credited lower wheat prices to the increase in seeded acres across Canada and the United States, as well as the good growing season so far.

“The demand for the food products is up, but it’s not going to push prices into that 22-, 23-, 24-dollar range that it has been two, three, four, five years ago.”

He said the growing season is mostly positive on the Canadian Prairies and the U.S. spring and winter wheat crops are doing well. As well, he pointed to strong durum crops in North Dakota, good red spring wheat prospects coming out of the U.S. Northwest and reports of excellent crops coming out of Wyoming and Colorado.

“So, I think there’s going to be a lot of wheat in the market and a lot of good wheat,” he said.

Freeman’s forecast is similar and said although the popularity of organic goods is growing, seeded acreage has outpaced it.

He said Farmer Direct is taking a wait-and-see approach until it can get a better look at the organic wheat situation in the U.S.

“We’re not really contracting out because of that. We think there is going to be a significant reduction on prices and we don’t want to get caught on the wrong end of that,” he said.

However, the price fluctuations will eventually even themselves out over the longer term as the supply and demand balance out.

He said organic production still pencils out as a good earner.

“Believe it or not, I think some guys are even figuring out if they farm organic, but still dump half their wheat at the conventional elevator, they’re still ahead of the game.”

On lentils, he said French greens and blacks will likely hold their values better than the large greens and should pay about 90 cents a lb., which is still down from about $1 per lb.