2007 Mexico Harvest Tour Report
January 15, 2008
The 2007 U.S. Dry Bean Council (USDBC) Crop tour started on Saturday, October 13, 2007, visiting the northern bean areas of Zacatecas.
On October 14, 2007 the USDBC visited the eastern and southern part of Zacatecas and for the first time in the Mexicos harvest tours, the bean planting areas of the state of San Luis Potosi that border with Zacatecas to the East and Southeast which are San Pablo, Salitrillo and Salinas Hidalgo were included in the tour. In addition to the new sites visited, the Jesus Maria location West of Fresnillo Zacatecas was included as well. The fields in these areas were noticed with droughts and their bean crop will register damages.
The USDBC team continued to Zacatecas and met with Secretary of Agriculture, Ranching, Rural Development, Fisheries, and Food Supply (SAGARPA) officials on October 15, 2007. The team traveled the next day to Durango to visit the Ramon Corona, Carrillo Puerto, and Guadalupe Victoria areas. This day the USDBC team made a stop at the bean processing plant in Guadalupe Victoria, Durango.
On October 17th the team visited the fields at Nombre de Dios, Durango in the morning and traveled to Chihuahua in the afternoon - evening. The visits to the Chihuahua bean areas started on October 18th while visiting the Menonite bean fields and stopping at a couple of bean processing plants.
On October 19th, the USDBC harvest tour ended with a meeting at the U.S. Embassy in Mexico City with the Minister Counselor of Agriculture Ms. Suzanne Heinen, Erick Kuss-Senior Agricultural Attaché, Mark Ford Agricultural Attaché and Benjamin Juarez Agricultural Specialist. During the visit, the USDBC team discussed the current bean production cycle in Mexico.
Mexico exports beer to the U.S. amounting to $1,589,736,230 in 2006 up from $1,331,424,855 in 2005. The U.S. imports more beer from Mexico than any other country.
What does beer have to do with Beans you ask?
The move in Mexico has been to convert bean acres to grain, under programs directed by SAGARPA. The demand for Malting Barley has accelerated the conversion in Mexicos largest bean growing state, Zacatecas. Growers have made the switch from Beans to Barley in the states best bean growing counties (Rio Grande & Sombrerete). According to Dr. Marcial Ortiz, new agronomic practices, better varieties, and good prices have helped growers to realize better returns.
Barley yields are running 3,300 KG per Hectare and growers are receiving $2.80 Pesos (USD $0.26) per KG resulting in gross returns of $9,240 Pesos (USD $856.00) per Hectare. When you compare to black bean production of T-39 variety, growers receive $6.50 Pesos per KG (USD $ 0.60). They are currently getting approximately 690 Kg/Hectare or a gross return of $4,485 Pesos (USD $ 415.00) per Kg, less than half of barley revenue. Beans just cannot compete.
You can imagine the impact barley has had on bean acres in Zacatecas. Areas that as recent as last year were all beans are now mainly barley, wheat and corn. Nearly 200,000 Hectares of bean production have been converted to other crops. The remaining bean production in Zacatecas is being pushed into the eastern regions of the state and into San Luis Potosi, which has now passed Chihuahua as the 3rd largest bean production state in Mexicos summer cycle. Why isnt barley being planted into these areas? These regions are more arid and the soil is poorer quality.
SAGARPA has a new variety of blacks called Black Zacatecas. The variety is hoped to replace Black Bolas and is similar to T-39 and Jamapas in the future. Prices to growers for blacks was 3.00 350 Pesos (USD $ 0.27-0.32) per Kg for Bola type and 7.00 Pesos (USD $ 0.65) per Kg for Jamapa type blacks.
This massive conversion to Barley, Corn and Wheat has led SAGARPA to re-look at the acreage numbers for beans. Dry beans are now produced in drier areas, resulting in historical yields not being met. Dry conditions in the major bean areas have stressed the bean crop and estimations are expected to be below normal.
According to SAGARPA Zacatecas, planting intentions started at 611,930 HA, but actually 536,000 HA were planted and from which 87,500 HA were damaged by the drought. SAGARPA Zacatecas are expecting damages in both quality and yield yet to be determined. The approximate expected bean production is around 295,000 MT, from which 80% are black beans, and the rest are Flor de Mayo, Flor de Junio, Bayo and Pinto varieties.
USDBC was also informed that close to 200,000 HA in which beans were traditionally planted until the past year, were switched to barley, wheat, and oats and feed corn this year. Barley is the most important crop conversion program product this year as explained in the beginning of the report. Only in the Rio Grande area, hectares planted with barley account today for 50,000 HA, a visible landscape change, at least for this year.
SAGARPA also commented that it is intended to have the planting colored beans and keep production only black bean varieties. INIFAP Zacatecas is working on a better black bean variety similar to the more valued consumer preferred black beans.
Durango planted less bean acres, again converting production from beans to corn, wheat and oats. However, the pinto bean production is up and is coming from black bean acres. SAGARPA would like to eliminate black bean production from the state and focus on pinto production. They are producing a new pinto bean Saltillo, which has excellent color and good drought resistance. Pinto Saltillo seed was provided to growers at either zero or very low cost, to encourage them to plant the variety. The program was very successful as 60% of pinto acres are Pinto Saltillo and 40% are Pinto Villa or Bill Z. The USDBC team talked to one grower who was harvesting Bola Blacks who also has pintos. When asked what his for next year is, he said no blacks all Pinto Saltillo beans. SAGRAPA has a second variety now called Zapata which likely will end up being called Pinto Durango.
Prices to Growers are running $6.00 - $7.00 Pesos (USD $ 0.55 0.65) per KG for Pinto Saltillo and $3.00 - $3.50 pesos (USD $ 0.27 0.32) for Bola Blacks.
Construction was complete on the processing plant in Guadalupe Victoria, Durango, but it was not running. Our expectation is that this plant and the other two will not operate for the 2007 crop.
SAGARPA official figures show that Durango planted 223,000 HA with beans, from which they expect to produce approximately 150,000 MT. 139,000 of those hectares are planted in Guadalupe Victoria District. Here they are expecting a production of approximately 120,000 MT. The team visited this district and in our opinion, their production expectations are correct. As mentioned before, 60% of these beans are Pinto Saltillo and the rest are other Pinto varieties. We did not notice any disease or plague problems as we did in previous years, and the quality of beans look good.
At first glance it would appear that the SAGARPA conversion program was working effectively here as well. However, weather played a bigger part in grower planting decision than the conversion program. Good early rains encouraged growers to plant more corn. Then it turned dry and growers were afraid to plant beans and planted oats instead. It then started raining again and the beans were planted. The net resulted in 30-40% less beans. Over all, Chihuahua has a very nice crop of corn, oats and beans. The beans are very nice quality and should yield well above average. Chihuahua is 60% Pinto Saltillo and 40% other pinto varieties.
After talking to a manager of a Menonite bean processing plant, we found out that they obtained-purchased the Pinto Saltillo foundation seed from INIFAP approximately two years ago and reproduced it in order to have seed available to be planted this 2007 Spring-Summer Cycle. He assured to us that they will continue to plant this variety because of its color resistance and expect that plantings of these beans will increase in the state.
We stopped at one facility in Cd. Cuauhtémoc, Chihuahua and noticed that they were processing and packing 50 KG bags of old crop pinto beans for World Food Program. The bags were marked Gift of Canada. This seems a good strategy for Canada to make points within the Mexican bean producers, while helping them with a little purchase of their local beans.
SAGARPA Chihuahuas latest figures show that they planted beans in 84,118 hectares and are expecting a production of 68,306 MT of good quality beans. After seeing the bean areas in Cd. Cuauhtémoc, we consider that their production expectation will be met.
San Luis Potosi Outlook
San Luis Potosi, is now the 3rd largest state surpassing Chihuahua in total bean acreage. This region is a small irrigated area but is primarily dry land production and is similar to Ojo Caliente in Zacatecas. The area is marked by rocky thin soil, arid conditions and poor weed control. This area produces mostly Flo de Mayo, Flo de Junio and Bayos.
San Luis Potosi planted this year 123,830 HA of beans, expecting an approximate production of around 86,400 MT. Due to its importance, it was decided by the USDBVC team to continue to monitor this area in the next Crop Tour, as it is now an important bean production state in the Spring/Summer cycle.
Harvest Tour Summary
Production and Agronomic practices have changed over the past five years. New seed varieties, better farming equipment, use of herbicides and fertilizer have improved Mexicos crop out look. Converting bean acres to other, higher value crops is making Mexicos farmers more competitive and more profitable. SAGARPA has implemented the conversion program to target crop production better suited for the land. For example, if a bean grower is producing Bola Blacks, the official support price for beans is expected to be $5.50 Pesos (USD $0.51) per Kg. The grower delivers his beans to the processor and receives $3.00 pesos (USD $0.27) per Kg. The processor, in turn, delivers the beans to a Government warehouse and receives the official price of $5.50 pesos. The direct cost to SAGARPA is $5.50 pesos however the bean value remains $3.00 pesos per Kg. Obviously, that is not efficient use of resources. The conversion program has allowed SAGARPA to better manage their resources.
SAGARPA has brought in newer and better equipment through programs designed to improve grower efficiencies and product quality. It is easy to see the results of the program. Growers are using better seed, cutters, and combines. You can see modern equipment all over the rural Mexico country side.