Hursh Consulting & Communications Inc.

Sometimes a market goes bonkers and that’s what has happened with lentils. Whenever craziness ensues, there are inevitably negative consequences and it will be no different with this bit of insanity.

Sky-high record price levels are certainly a good news story for producers lucky enough to sell into this rapidly rising market, but observers are actively speculating on the potential downside in the months and years ahead.

First, for areas where lentils are not normally part of the crop rotation, let’s recap price performance. Red lentils were a good price at harvest time, selling off the combine for around 35 cents a pound. Now, they are 55 or more. That 20 cent a pound price increase is an extra $12 a bushel.

Top quality large green lentils were selling for around 40 cents a pound off the combine. Now some buyers are reportedly paying 70 cents, an $18 a bushel increase in about four months.

If you grew a really good crop of lentils and had the foresight/luck to hold them until recently you could have grossed $1,000 or maybe even $1,500 an acre.

Of course, very few will have reached those lofty returns. Stories abound of could have, should have, would have, from producers who wish they could have grown a bigger crop and wouldn’t have sold it so soon.

Analysts attribute most of the price strength to dry conditions in India which have stoked the demand for lentil imports. A chunk of the price strength also comes from the weakening Canadian dollar.

New crop contract prices were available in the early fall, months ahead of the normal time and those prices have also ratcheted up to record levels. Prices of 40 cents a pound on the first 10 bushels per acre have been available with an act of God clause in the contract.

This makes lentils the stand-out winner in 2016 cropping options. Some producers who have never grown lentils want to try their luck and price contracts are being signed with farms in such unlikely locations as Prince Albert and Winnipeg.

Lately, new crop red lentil prices have retraced a bit. Some buyers have withdrawn from the market. They’ve filled their contracting needs even before the time when new crop contracts are usually just being initiated.

This overheated market will produce winners as well as losers.

There’s a reason why lentils aren’t grown in higher moisture regions. If those regions have drier and warmer weather than normal in 2016, they might grow a decent crop. Otherwise, there could be huge crop failures.

In areas where lentils are normally grown, many producers will be pushing their rotation to seed as many as possible and that could result in disease issues. In some cases, producers are rolling the dice and seeding their entire farm to lentils.

If you don’t have a contract, will you be able to sell 2016 lentils and what will the price be if acreage and production is as high as anticipated? Producers in many other locations around the world are also excited to cash in, so international competition will likely increase.

What will happen with negotiated sales with buyers in far-away countries when the price inevitably falls? Lentils marketers would seem to be facing a lot of risk.

Analysts say the cure for high prices is high prices. Overproduction typically leads to a number of years of depressed returns.

Lentils are hot and that probably means someone is going to get burned.

You can question the pasteurization of milk, express concern over the safety of common disease vaccinations and doubt the safety of GM foods and incur fewer wraths than if you challenge the holy grail of climate change.

For the record, I side with science on pasteurization, vaccination and biotechnology, but climate change science isn’t in the same league.

Sure the climate is changing. Always has. Yes, human activities are probably having an impact. There are a lot of us. But every weather event now ends up being linked to climate change and somebody uses it to promote their anti-development agenda.

It was dry over much of Western Canada this summer – forest fires, shriveled crops – just the sort of ammunition the anti-development crowd loves. “We can expect more of this as the climate continues to change,” they love to say.

Lots of factors go into a heavy forest fire season and in the agricultural area we’ve seen droughts of far bigger scale and longevity. The heavy rain that recently hit much of Saskatchewan and parts of Manitoba was unusual for the end of July, but it wasn’t epic.

If the climate is really going to hell in a handbasket shouldn’t world food production be declining? To date, better production technology and farming practices have more than counterbalanced any perceived climate effects.

The experts have trouble predicting the weather two weeks from now. A seasonal forecast is little better than a coin toss. Will 2016 be another drier than normal year over much of the Prairies? No one really knows, but whatever happens you can be sure it will be attributed to climate change.

Is the long term climate trend hotter and drier, or hotter and wetter, or perhaps hotter with more variability in precipitation? Climate change advocates love that last one. Rather than tying themselves to a trend, they can point to any climate deviation as proof positive.

Climate change hysteria is being used as a club to beat the fossil fuel industry into submission. Oil shouldn’t be extracted from the ground. It shouldn’t be moved by pipelines. It shouldn’t be sold to other countries. It’s ruining the climate, don’t you know?

For the sake of the planet, Canada should do the right thing and withdraw from oil production even if that cripples the economy. Just because oil from other countries would fill the void with little or no net effect on emissions is seldom mentioned.

A surprising number of people are happy every time big, bad oil is vilified, but very few people want to make any personal sacrifice.

Reducing fossil fuel consumption is a worthy objective worldwide and as Canadians we should do our part. That doesn’t mean shutting down the industry; it means reducing personal consumption.

One of the best policy tools would be a carbon tax. We can debate the size of the tax and how it should be applied, but if you really want to curb fossil fuel use, put a tax on it and dedicate the money collected to developing renewable options.

The idea is about as popular as a skunk at a summer barbeque. People want big oil to be sacrificed on the climate change altar. They don’t want to make any sacrifice themselves.

During the upcoming federal election campaign, expect all of the political parties to give lip service to addressing climate change. Don’t expect any of them to be brave enough to advocate a carbon tax.

After watching from the sidelines for a couple years, I’m ready (I think) to experiment with intercropping.

Intercropping certainly isn’t a new idea. It probably reached its height of popularity in Western Canada with peola, a mixture of peas with canola. The peas fixed nitrogen for the canola while the canola gave the peas upright stems on which to cling.

There was never a large acreage of peola, and the practice pretty much ended when herbicide tolerant canola came along.

These days, one of the most interesting combinations is chickpeas with flax. Sulfentrazone (Authority) is now registered on both crops and this can provide very good control of kochia, buckwheat and pigweed. What’s still lacking is a way to control brassica weeds in the combination.

Lana Shaw from the South East Research Farm at Redvers, SK has been working with the chickpea – flax combo. She’s been putting chickpeas down the fertilizer tube with flax off to the side. The chickpeas go in deeper, but everything is in the same row.

It appears the flax is able to utilize a considerable amount of nitrogen that’s fixed by the chickpeas. However, further study with nitrogen markers will be needed to know for sure what’s happening between the two rooting systems.

The chickpeas potentially benefit from having another type of plant in the canopy to help stop the spread of disease. Chickpeas, particularly kabuli chickpeas, typically require numerous fungicide applications to ward off ascochyta. It’s hoped that intercropping will negate the need for a couple fungicide apps.

Both chickpeas and flax are later maturing and relatively shatter resistant so harvest timing has the potential to work out relatively well.

Colin Rosengren, a farmer from the Midale area, has been growing a chickpea – flax intercrop on a field scale, but he has used a somewhat different approach. Rather than both crops in the same row, he alternates between two rows of chickpeas and two rows of flax.

This requires some messing around with the drill tubes and not everybody will be interested in that sort of time investment at seeding time. For that matter, not everyone will have the patience or the facility to separate the crops after harvest.

With lots of acres to cover, most producers aren’t interested in any cropping practice that will take extra time at seeding and may create extra headaches at harvest. At least they aren’t interested unless substantial benefits can be demonstrated.

But what if you can get higher total yields, without the use of nitrogen for the flax crop? What if you can eliminate a couple of fungicide applications? What if the flax also helps the chickpeas to mature a bit earlier, potentially missing a frost?

Not only will the intercrop be better financially, it will also be viewed as more environmentally sustainable. Rosengren is a principle in Three Farmers, the company that produces and markets camelina oil.

Three Farmers is also marketing crunchy, roasted chickpeas as a snack food and topping. Each package has a trace back code. On the packages that link back to Rosengren, there’s an explanation of his intercropping. It’s a great sustainability message.

I haven’t asked Crop Insurance yet how they view intercropping. Perhaps if the crops are in separate rows, they’ll consider half the acreage as chickpeas and half as flax. It should be an interesting conversation.

I also preparing myself for people driving past the field and wondering what the heck is growing there.

Crop                Yield              Price            Expense/Ac           Net/Ac

HRSW                38                  5.50                      210                   (1)

Durum                37                  9.00                     210                   123

Oats                    82                  2.75                     197                  29

Barley                58                    3.00                     207                  (33)

Canary              1174                   .24                      202                    80

Flax                     23                    12                      205                     71

Canola                31                     9.20                    277                     8

Mustard            1069                    .29                      190                    120

Peas                   34                     6.50                   220                     1

Lentils             1371                      .25                     242                    101

How do returns from the various 2014 cropping options compare in Saskatchewan? Of course, it all depends upon the assumptions you use, so let me explain where the numbers come from in the table above.

The yields (expressed in bushels per acre for most crops and in pounds per acre for canaryseed, mustard and lentils) come from the province-wide estimates within the November final crop report issued by the Saskatchewan Ministry of Agriculture.

The most contentious numbers will be the prices. I’ve tried to express an FOB farm price for the typical grade and class of the particular commodity. On spring wheat and especially on durum, there’s a wide range in grades and prices and so an intermediate number has been used. For barley, a feed price has been assumed. On mustard, this is an average of current prices for the three different types. For peas, I’ve used the price for yellow. On lentils, the price of an X3 red has been used.

Contract prices that were available earlier in the year have not been factored into the equation. These are estimates of current cash prices for this year’s most typical grade. These numbers were put together in early November from a number of sources. Prices may have changed by the time you’re reading this. It’s also important to note that prices vary by location.

The expenses per acre come from the Crop Planning Guide published this spring by the Saskatchewan Ministry of Agriculture. In most cases, the costs for the dark brown soil zone have used. These are total rotation expenses including variable and fixed costs but without any consideration for return to labour and management. Everyone’s expenses will be different, but using these published estimates provides a common denominator.

Conclusions? Anyone able to grow a decent durum crop is making a lot more money than if they had grown spring wheat. Canola is not very attractive if you only achieve average yields. Flax and mustard are interesting options to canola, but you have to wonder what will happen to prices if there’s a significant acreage increase for those crops in 2015. Feed barley is a big money loser. Peas are not profitable for many producers. Like durum, lentils are a winner this year if you were able to grow a decent crop.

The sprayer booms were being folded up for the last time after another fungicide application on the chickpeas. It did not go well.

The left boom tip did its normal high aerial arc, but lodged on the top of the frame before sliding into place. “Need to adjust the alignment a bit,” I thought while exiting the cab. Just a little push and the boom would slide past the frame.

It required a bigger push than expected and then the boom dropped like a rock into its holder with my right hand underneath. In an instant, I found myself face down on the ground assessing the injury.

Fingers were all attached. Some blood was running out of the palm. Above the wrist and below the base of the thumb had been crunched, but I could still wiggle the thumb. It hurt like hell.

Eventually, I was able to finish putting the sprayer into transport and get back to the yard, but there was considerable moaning and groaning.

My wife says I’m a wussy when it comes to pain and she’s probably right. No bones were broken and some heavy duty antibiotics should ward off any infection. Gradually, I’m able to make more use of the hand.

A right thumb is rather invaluable for running a combine, not to mention all the minor maintenance and repairs that need to be done before the combines are ready to roll. So I’m pretty impatient for the healing process.

I’d bemoan what the injury has done to my golfing, but my game was hopeless to begin with.

Reflecting back on the accident, it’s scary to think how serious it might have been. I’ve often wondered if I’d have the intestinal fortitude to collect severed fingers and take them with me to the hospital in the hope of reattachment.

I’ve also wondered what it would be like to have a hand or other body part caught in a piece of equipment, with nobody around to help.

Back in 2003, Saskatchewan farmer Bruce Osiowy cut off two of his own fingers after being caught in a rock picker for nearly three days. The accident received national attention.

I make a point of keeping my cell phone in my pocket rather than setting it out in the cab. However, at this particular field location there may not have been cell phone coverage.

It was reasonably close to the road, but the road is really a trail and it can go without any traffic for days at a time. If my wife failed to hear from me for an extended period of time, she’d send out a posse. It wouldn’t take three days, but even half a day of hurt and bleeding would be torture.

I wasn’t carrying my Leatherman tool with its knife that the kids gave me, so there would have been no slice and release option.

Over the years, I’ve become less rambunctious and more safety conscience, but there’s obviously still room for improvement.

In my view many safety recommendations have limited merit. For instance, who is going to wear a seatbelt when running a tractor across level ground?

The best defence is strategic thinking. What might happen if I give that snagged sprayer boom a push? Do I have my cell phone with me at all times? If I’m working alone, is there someone to check in with periodically?

The busy harvest season is approaching. Think safety.