Farmers drive ‘artificial’ lentil price rise by holding back bumper crop

Victorian lentil prices have hit $635 a tonne but farmers are refusing to sell, creating artificial market signals as the harvest season unfolds.

Lentils have reached a seasonal peak of $635 a tonne delivered to Melbourne, providing a modest reprieve, yet remaining nearly 29 per cent below last year’s $890.

However, both farmers and grain traders agree the market signal could be artificial, with growers holding back lentils due to the low price.

Market Check research analyst Richie Mould said despite the slight uptick in lentils in the past week there wasn’t a lot of substance or any strong signals that the values were likely to recover to the highs of last year.

“Harvest has been slow to start in the southern part of South Australia and also Victoria and we are expecting both yields and quality to be pretty decent,” he said.

Mr Mould said farmers were holding both old-crop lentils, and possibly new-crop lentils because of the price.

That move, had in fact, created the slight uptick with traders placing higher bids in the hope that more lentils would be released into the domestic market.

“They (farmers) are possibly artificially holding the market up,” he said.

“The fundamentals haven’t changed, Australia is expecting a big crop.”

Projections from the Australian Bureau of Agricultural Resources Economics crop report forecast a planting area of 530,000ha of lentils in Victoria with estimated yields forecast at 1.42 tonnes a hectare.

Farmers are prepared to hold lentils and store them on farm this harvest. Picture: Zoe Phillips

National lentil production was anticipated to increase by 1.5 million tonnes, 71 per cent above the 10-year average and the overall area planted to lentils nationally was forecast to increase further in 2025-26 to a record 1.1 million hectares.

Birchip farmer John Ferrier has already put the harvester in the lentil paddock this harvest and said results were good. But he still wasn’t satisfied with the prices on offer.

“Lentils for us are yielding 1.5 a tonne and that is a good result after a dry spring,” he said.

Mr Ferrier said he had enough on-farm storage to hold lentils and would wait until prices improved further before offering them to the market.

He has also windrowed, and started harvesting canola, and said it was yielding 2 tonnes a hectare, and stripping of barley and wheat was a little while off with the cereal crops still green.

Victorian Farmers Federation grains group president, Ryan Milgate said aside from canola, which was trading at around $810 a tonne, commodities were not performing great in terms of price.

He agreed the improvement in lentils could be an artificial rise due to farmers holding the crop.

“I think we will see a lot of crop held on farm, and not just lentils,” he said.

However, he said the market signal for a rise for lentils had to be considered as a positive.

While wheat and barley often moved around in price by about $10 to $20 a tonne in a short time frame, it was possible for lentils to show larger shifts.

“It’s not uncommon to see lentils move by $50 to $100 a tonne,” he said.

Mr Milgate plans to start harvesting barley in the coming days, but hadn’t begun harvesting lentils yet.