Storage decisions influence pulse marketing

Mr Koch, who is based in Maitland and provides grain marketing services for growers, said decisions could depend on a multitude of factors such as varieties, storage options and grade.

“It is a fairly multi-pronged decision and it all starts with whether growers want to store on-farm or deliver into storage,” he said.

Mr Koch said there had been a big shift towards on-farm storage in recent years.

“There has been a lot of investment in sheds and upright silos,” he said.

“People are willing to invest in permanent infrastructure and there is more potential value in storing pulses on-farm than cereals.”

He said the other available options were private commercial storage, bulk storage, such as Viterra, or other buyers.

“Those decisions can be dependent on quality,” he said. “If you’ve got number one grade standard, all doors are open.

“If the grain is out of specification, there is a high chance it will have to be stored on-farm, cleaned and delivered later.”

Mr Koch said some delivery points did have a small amount of leeway for grain slightly out of spec, but it depended on the facility and the level. Storage decisions could also be based on a desire for flexibility later.

“On-farm storage opens up options to sell across multiple delivery points, whereas if you deliver to a storage facility, it can tend to limit the range of buyers,” he said.

“The trade-off is the time and effort with storing on-farm versus limiting available buyers.”

Mr Koch said it was unlikely that growers would look to sell much off the header this season, with several pulses priced quite low.

“I think growers will generally sit and hold, or sell only a little,” he said. “A lot of farmers are geared up for on-farm storage and will certainly be using that this year.”

Mr Koch said there were options to limiting some of the price fluctuations within the market, but these carried their own risks.

“Pulses can have forward selling throughout the year but they are very much locked into a number one quality contract,” he said.

“If the grain is outside that, there is no leeway.

“People are reluctant to lock in unless the price is high.”

Mr Koch said early signs were for high grain quality but there was still opportunity during harvest for downgrading to occur, with examples such as heavy winds in late October shattering pods, or significant rain leading to wrinkling.

“The best thing is to have the header ready to go the minute the pulses are ready to harvest,” he said.

Mr Koch said the trends in pulses within the past few years had been a shift towards small reds, at the expense of medium reds, predominantly based on agronomic decisions.

“Small reds generally sell to Bangladesh and Pakistan while medium and large reds go to India and Sri Lanka, but lately there has been a shift in these countries towards small reds too,” he said.

Lentil acreage has lifted, in-part driven by high prices at sowing, while there has been a swing towards chickpeas, which are still holding good prices. Mr Koch said low prices have had people move away from beans somewhat while pea areas remained fairly stable.