What's driving Australia's lentil boom?

Australian farmers are set to produce less wheat, barley and canola this year because of dry seasonal conditions and high input costs.

But they are on track to produce Australia's biggest crop of lentils.

National commodities forecaster ABARES says lentil production is set to rise 3 per cent to a record 2.2 million tonnes.

"Plantings have exploded across Victoria and South Australia, with production now creeping into places like WA and New South Wales," said Market Check chief executive Nick Crundall.

"Since 2020 there's been nearly a 150 per cent increase in acreage planted to lentils, so there's a been a massive response from growers."

He said there were a few reasons growers had shifted to lentils, including the crop's ability to fix nitrogen, which meant it didn't need as much fertiliser.

"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."

Volumes up, but prices down

Lentil prices went beyond $1,000 a tonne a couple of years ago, but with production rising in Australia and Canada, prices are under pressure.

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

"Prices are still solid, but they're trending lower because of more acres [dedicated to lentils] and also large stocks that are still sitting in Victoria from last year's harvest."

Mr Crundall said more than half of last year's lentil harvest in Victoria was yet to be sold.

"Lentils are sitting in sheds and silos, so growers have said no to these lower prices, but that's now adding to the current outlook which is struggling to see a rally," he said.

"The obvious implication of this is that it's a bearish outlook."

Betting on lentils

In the South Australian government's latest Crop and Pasture Report, it estimated lentil plantings would increase by 12 per cent in the state compared to last season.

"This firmly establishes lentils as the third largest crop area [in South Australia] behind wheat and barley," it said.

Grower Matt Cadd, who farms on SA's Yorke Peninsula, said he had increased his lentil planting by 25 per cent.

"Given the high fertiliser cost over the last couple of years, canola has dropped out [of our program]," he told the SA Country Hour.

"So we're just doing wheat and lentils this year."

He said despite lower lentil prices, it was still a good option for his farm this year.

"Lentils actually have nodules on their roots and take atmospheric nitrogen and fixate it into the soil," he said.

"So they don't require any synthetic nitrogen [fertiliser] application and actually fix some nitrogen into the soil for the next year's crop, like a wheat crop, to use."

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