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A Brighter Market Picture Set for Beans
September 18, 2006

U.S. dry edible bean production is expected to total 23.3 million cwt in 2006, down 15% from last year but still 31% above 2004, according to USDA. Production is expected to be below last year in 11 of the 18 producing states, with hot, dry conditions to blame for much of the decline.

Planted acreage, at 1.61 million acres, decreased 3% from last year, due to lackluster dry bean prices relative to other crops. At the
U. S. level, planted area of pinto beans is down 18%. Great northerns, kidneys, small reds, cranberries, small whites, and limas also declined in planted acreage from last year. Planted area increased from 2005 for chickpeas, navies, blacks, pinks, and blackeyes.

Harvested acreage (as of August estimates) is forecast at 1.52 million acres, which would be down 3% from last year. Yield is expected to average 1,534 pounds per acre, a decrease of 210 pounds from last year but 75 pounds more than two years ago.

In 10 of the 18 USDA-surveyed states (including
Idaho and Washington, where chickpea area is up), harvested area was expected to be down. North Dakota, which accounts for 40% of U.S. dry bean seeded area, expects to harvest a 6% larger area in 2006, with increases in navy, black, pink, and other bean types outweighing declining pinto bean acreage.

Acres planted to navy beans increased by 43,000 in the
U.S. and 28,000 in North Dakota. On the other hand, pinto bean planted acres decreased by 145,400 in the U.S. and 47,000 in North Dakota.

The largest reductions in production are expected in key producing states such as
Colorado, North Dakota, Nebraska, and Minnesota. Growers in Michigan, the second-leading producer, anticipate above-average yields as weather conditions have remained favorable since the start of the season. The same is true in Colorado and New York, where yields may be the second-highest on record, and in Texas where yields could reach a new record high.

Dry bean yields in
North Dakota may be the second lowest in the past 13 years, due to excessive heat and dry soils this summer.  North Dakotas production was projected to decrease from 8.588 million to 6.3 million this year.

USDA will release the first official estimate of production by class on December 11.

Prices low in 2005/06, but improvement expected

During the first 11 months of 2005/06, grower prices across all classes of dry beans averaged $18.5731% below a year ago. With the exception of California, grower prices averaged less than a year earlier in every major dry bean state. In North Dakota, the all-class dry bean price reached a seasonal low in May ($14.00/cwt) but has begun to move higher ($14.90/cwt in July) in anticipation of the new smaller crop.

From September-July of 2005/06, grower prices in
North Dakota averaged 39% below a year earlier, with a recovery in dry bean prices expected over the coming season. The extent of this recovery will depend in large part on final yields, domestic demand, and commercial export and international food aid demand. As usual, the price outlook varies by class, with higher prices likely for such types as pinto and red kidney beans and lower prices likely for black, blackeye, and garbanzo beans.

On average, higher prices for some of the major bean classes will help aggregate dry bean prices strengthen into mid-2007, with the season-average price across all bean classes expected to exceed $21 per cwt.

During the second quarter of 2006, the Producer Price Index for canned dry beans averaged 5% above a year earlier. During the same period, the retail price for dry packaged beans averaged about 2% above a year earlier and 4% above the first quarter of 2006. In July, consumers paid an average of 83 cents per pound for packaged dry beans, down 1% from June, but up 4% from a year ago and 7% above 2 years ago.

Export volume up 61%

Given lower dry bean prices, a weaker U.S. dollar, and continued food aid demand through the first 10 months of 2005/06 (September-June), the volume of dry bean exports rose 61% from a year ago.

During the first 7 months of 2006, increased supplies and lower prices stemming from last years larger crop strengthened export movement.

Improved stocks and lower
U.S. prices increased trade in such crops as pinto beans, black beans, red kidney beans, and navy beans. Among the major export markets, sales improved to Canada (up 112%), Mexico (up 150%), and Japan (up 39%). The volume shipped to the United Kingdom increased 16%, led by navy and large lima beans.

Although the pace of exports is likely to slow with smaller supplies and higher prices during the last third of 2006, export share of supply is expected to return to the decade average of 18%.

Dry bean market data courtesy Gary Lucier, USDA ERS economist.  See more
U.S. dry bean market information in the USDA ERS Dry Bean Briefing Room online:


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