Supply chain key to pulse markets

With a yearning to better understand the pulse supply chain in order to identify opportunities for value-adding, 2013 Nuffield Scholarship recipient Lachie Seears, Boonderoo Pastoral, Lucindale, visited key pulse markets and growing regions around the world last year.

"My scholarship was sponsored by the GRDC, and my topic was to understand what happened to our pulse crops once they left the farm gate," Lachie said.

"Australian producers are fantastic at growing our crops, we can harvest them, we can store them and we are fantastic at loading them into trucks, but once that truck goes out the farm gate, the vast majority of us don't understand what happens to turn that commodity we grow into a consumable product you can buy off the shelf.

"We all grow our pulses differently depending on where we are, but whatever happens post-farm gate, we're all in the same boat."

Lachie crops wheat, barley, canola and broad beans on his 2900-hectare property, with vegetable seed also grown under centre-pivot irrigation. Livestock also features in the form of a 5000 first-cross ewe flock and a 500-cow self-replacing Angus herd.

Broad beans have been Lachie's pulse of choice, thriving in a high rainfall zone - the property receives an average rainfall of 650 millimetres - unlike other pulses such as lentils. Bean stubble has also proved ideal for fattening lambs.

However, he was never sure he was being fully rewarded for his pulse production.

"One of the biggest reasons for undertaking my Nuffield project was that I always felt that I was getting screwed over by the processor," he said. "I felt that they were making big margins and I was getting offered a lesser price. I'm sure a lot of people have that feeling.

"I started my travels by visiting a few processing plants in Australia, and it pretty quickly became evident to me that these guys are investing a lot of money and capital to be able to turn that commodity that we send off in a truck into the bagged product or something they can then market themselves.

"One thing I don't think farmers really understand is the amount of risk that processor is taking on. If we didn't get paid for our pulses, it's only a two-hour car ride to go and sit in someone's office and see when the money is coming. If these guys didn't get paid, it's quite often a 12- or 18-hour plane ride to a different country, where they don't speak English, to find where the pulses have gone.

"I also think there needs to be a realisation that we're producing a commodity, and if we want those product prices, we need to be investing the money to be able to market the product."

Lachie's overseas travel took him to some of the key destinations for Australian broad beans in the Middle East and North Africa.

"A lot of the beans we export end up in Egypt," he said. "I visited some processing plants in Egypt, and they're very much world class, but you also see that they've got some pretty backyard operations as well."

He then headed to Turkey, a major player in the movement of the world's pulses, before visiting pulse-producing regions in Europe.

"I thought Turkey was just a little country - I didn't really have a good understanding of the role they played in the world pulse industry," he said. "It's such a huge hub to get European produce into the northern African and Middle East countries."

His travels emphasised that the main barrier to the growing demand for Australian pulses was location.

"I was talking to one bloke in Turkey and he said they love our crop - we're excellent on the quality and everything else but we're just too far from the end consumer," he said. "He can get a boatload of stuff out of Ukraine and the Eastern Bloc in four days, but to get it on a ship from Australia over to the Middle East we're looking at 40 days on the sea.

"One thing I now have a real appreciation for after spending some time in France and the United Kingdom is just how close they are to the Middle East and Saudi markets.

"A lot of the French and UK producers don't really understand how lucky they are to have that access to that market."

His travels then took him to Canada, where he found transport issues were a major hurdle.

"Canada was very different to Australia in that all of our production is usually around the edge of Australia, whereas Canada has had to build theirs going across the country, putting a huge reliance on their rail lines," he said. "They can have trouble getting their crops out of Canada when the weather doesn't do the right thing.

"I visited Simpson Seeds in Moose Jaw, Saskatchewan, and they are just crawling over themselves trying to get railcar access to be able to move their products from their processing plant over to the coast. It's a big nightmare for them."

But he says the Canadians are doing a great job of value-adding to their pulses by adding pulse proteins to dog food or producing pulse flours.

"With increasing numbers having dietary requirements and gluten allergies, I think making things like flour from the pulses is going to be hugely beneficial to the Australian farmer," he said. "It gives me a lot of optimism that the pulses we're growing are going to be worth a lot more as the years go on."

* Full report in Stock Journal, May 1, 2014 issue.