Marketing Lentils

[JDGreen]

2004 05 06 were supply/demand fundamentals.. Now 2002 was a year where quality was crap yet they brought a very fair price. Guys that panicked dumped like you say on the market early for 12 cents yet the same crap fetched 22 cents within 60-90 days. I will not panic and dump on the market. Been to this dance a few times already. Best of luck to you I think we must live in same area.

[mbratrud]

We will all need a little luck here I think.

Where are you at JDGreen?

I am near Weyburn.

2002 was the type of year I am refering to. 2004 had some issues as well with frost damage.

[Kodiak]

Hey guys, I think I have the answer! The CLB. Canadian Lentil Board. With a monopoly. It could really help. Blend the prices of the low grades with the high grades. Force everybody into a pool and then it won't matter what you do, it's out of your hands! And JD and Mark, you won't have to worry about a marketing strategy or about trying to understand market psychology. You'll both get the same price and everything will be just rosy!

Simple.

[mbratrud]

Kodiak, What fun would that be?!

[wmoebis]

Becareful Kodiak, I jokingly mentioned that about a year ago on here and almost got shot.

However you made me wonder how many lentils are bought in the lower grades and blended out into top grades by the buyers for sale? Maybe some of the lentil buyers/shippers on here could answer?

A lot of low grade wheat is bought and blended up and shipped for the grain companies profit.

[bucket]

wmoebis said

"A lot of low grade wheat is bought and blended up and shipped for the grain companies profit. "

To certain extent that is true but the real winners are the guys from manitoba that get to blend their fusarium shit and get paid a #2 for it. That is where the support for the board comes from and that is why fusarium is a bigger problem every year.

If the cwb would quit putting a premium on the shit grain or at least pay the spread to the farmers growing the good quality grain it would be a little more acceptable.

In the lentil market the guys with good quality get paid for it, the guys with garbage lentils get paid less or hold until the market turns.

[wmoebis]

Exactally bucket "That is what I was getting at."

It was ment to bash the CWB. Thanks for helping me out.

I am not sure you are right that there is no blending in the pulse market although.

[dave4441]

There will always be some, but tight grade specs will make it difficult, nothing could ever be blended into a #1, some could be blended from X3 into a #2 but next to none from a #3 to a X3, or so small it would not be worth worrying about. A farmer can blend it himself as well and take the risk on making the grade. Whoever takes the risk gets the reward. Often blended prices are given to the grower and he gets alot of the benifit and does not have the risk.

[dave4441]

Problem in this lentil market is that once any shorts are covered, so many of the buyers really want X3/3 lentils. We sell them #2 or better reds because that is what we grow in Canada. If they have a cheaper X3 or #3 option they will take the lower price in many markets. See less demand for #2 reds and more for X3 in coming weeks.

[wmoebis]

So then to move product do the marketers sell #2 into #3 market and price? Because that is what we grow.

Which would drop our price of #1 and 2 and X3 and 3's or do we go off market because we don't have product demanded.

[Zaphod]

Here's another perspective on quality. I particularly like the part about Alliance doubling or tripling their margins on poor quality once they've split them.

http://business.financialpost.com/2010/09/09/alliance-grain-traders-waiting-on-delayed-lentil-harvest/

[dave4441]

Not 100 percent sure as we are breaking new ground on this. If there is cheaper product available, buyers will take that lower quality at a lower price and cancel a higher quality sale. Just depends on spread. Do not think there is much less volumne available, just that it is not available to the market right now. Talking about reds only. Greens way different story and mkt has reacted way different.

[JDGreen]

what are we breaking new ground on??? This is a repeat of 2002 all over except worse..