Monday, August 29th, 2011
This is now the consensus after a number of summer meetings. This theme was first put forward at the recent Canadian Special Crops meeting held in Vancouver, and then again at the US Dry Bean convention in Hilton Head South Carolina. It was reinforced by the USDA’s latest Vegetable and Melons Outlook. The aggregate numbers indicate a drop of 36% across most market classes with declines centred in the major classes: Pintos (-52%), Navy (-31%), and Blacks (-25%).
White Pea (Navy) bean Acres in North America may only reach 260,000 acres. In order to attain an available supply level that meets current expected global usage of just under 300,000 Mt. (6.2 million bags), yield will need to exceed the current projections of 1720 lb/Ac. Carry-over from 2010/11 is thought to be 1.5 million bags. Using current yield projections plus the carry-over suggests available supplies of 5.972 million bags against an expected demand of 6.2 million.
These numbers have led to some speculation within the industry of a ‘real’ shortfall, however as one wag suggested we have never yet run out of beans.
Meanwhile reports are circulating that better weather in the major growing regions of; North Dakota, Minnesota, Michigan, Ontario and Manitoba has and is improving production prospects. A recent road trip and field walks this writer took confirms this for both Ontario and Michigan. However canopy size and pod set does not appear to be much better than just average.
The market is signalling stronger prices, for the crop in the field with a $40.00/cwt ‘on the Web’ price having been posted for some time. Indications in Michigan are currently at $48.00/cwt on open market (un-contracted white beans) for harvest delivery. Concerns are growing for the market’s ability to convince growers to plant beans in 2012. Advances in corn prices in particular, because of deteriorating production prospects for this year, are putting a new higher floor into the market. As one state-side grower quipped, “If they start out with a $50/cwt price I may consider growing Navies but likely won’t contract any. I am booking (contracting) corn at better than $6/bu. cash for 2012 and ’13; anything under the mid $50’s for Navy (white) beans doesn’t give me sufficient return over the other crops, never mind my risk, time, cost and grief to grow them.”
Growers would be well advised to use some sort of comparative margin analysis or spread sheet to give them a sense of return of the various crops and not rely on polished sales pitches or hack-kneed truisms like – “beans have always been good to me!”
A 2010 Cost of Production COP used in Michigan, to do just such an analysis can be found here. Growers may wish to adapt something like this by tweaking it for their own use.