What's driving Australia's lentil boom?

Australian farmers are increasingly turning to lentils, with production set to hit a record 2.2 million tonnes this year. This surge comes as farmers face challenges with traditional crops like wheat, barley, and canola, driven by dry seasonal conditions and escalating input costs, particularly for fertilizers.

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Plantings have exploded across Victoria and South Australia, with production now creeping into places like WA and New South Wales.

The shift towards lentils is significant, with acreage planted increasing by nearly 150% since 2020. This trend is particularly pronounced in Victoria and South Australia, with expansion into Western Australia and New South Wales. "Plantings have exploded across Victoria and South Australia, with production now creeping into places like WA and New South Wales," said Nick Crundall, chief executive of Market Check. He noted that lentils' ability to fix nitrogen reduces the need for costly fertilizer applications, making them a more economically viable option.

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You don't need to apply nearly as much, if any nitrogen, so you can get around some of the input cost pressures by growing lentils compared to say canola.

Despite the boom in production, lentil prices are under pressure. Prices have dropped from highs of over $1,000 a tonne a couple of years ago to around $660 a tonne delivered into Melbourne/Geelong. This decrease is attributed to increased supply from both Australia and Canada, as well as substantial unsold stock from last year's harvest, particularly in Victoria. "The lentil price is about $660/tonne delivered into Melbourne/Geelong at the moment, so gone are the days of $1,000 tonne lentils," Crundall commented.

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The lentil price is about $660/tonne delivered into Melbourne/Geelong at the moment, so gone are the days of $1,000 tonne lentils.

Growers like Matt Cadd on South Australia's Yorke Peninsula have increased their lentil plantings by 25%, largely replacing canola in their crop rotation due to fertilizer costs. "Given the high fertiliser cost over the last couple of years, canola has dropped out [of our program]," Cadd explained. "So we're just doing wheat and lentils this year." Australian lentils are primarily exported, with India and Bangladesh being key markets. The current market outlook for lentils is described as bearish due to the ample supply and lower prices.

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Given the high fertiliser cost over the last couple of years, canola has dropped out [of our program]. So we're just doing wheat and lentils this year.