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Northarvest Market Outlook
June 18, 2008

Dry Edible Beans: Supplies Remain Tight, Prices High

Per capita use of dry beans increased 3 percent in 2007 to 6.6 poundsthe third consecutive annual increase after reversing a string of five consecutive annual declines. Little change is currently expected in net domestic dry bean use in 2008, with supplies remaining tight and prices high.

Acreage ExpectedTo Drop in 2008

According to the USDAs Prospective Plantings, area planted to dry edible beans is expected to decline 8 percent this spring from last years 1.53 million acres. Although the direction of change for this estimate has only missed once in the past 20 years (in 2006 a 3-percent increase was expected and actual dry bean plantings were unchanged), acreage intentions are subject to market adjustments. A year ago, area planted to dry beans exceeded the March intentions by 22,400 acres. Final planted area depends on factors such as weather (e.g., excess spring rain may favor increased dry bean area) and changes in relative price relationships among crops. This year, prospective dry bean area was down because of broad price strength exhibited among competing crops, especially soybeans (prospective acreage up 18 percent) and wheat (area up 6 percent).

Although area devoted to field corn is expected to be lower in 2008, the crop remains a potent alternative for growers still on the fence.

With the exception of
Nebraska and Colorado, dry bean acreage was expected to decline in all major dry bean states, with area down in 12 of the 18 surveyed states. Although Nebraskas dry bean area was projected to reach 125,000 acres, it would remain the third-lowest for the state over the past 30 years. Similarly, the prospective dry bean area in Colorado would be the second-lowest in the state since 1915. Since planting does not finish until June in some areas, further adjustments to indicated acreage will likely take place. The next acreage estimate for dry beans will be released in the June 30 Acreage report.

In the late-March Prospective Plantings, the major area intentions were as follows:

"        North Dakota, the leading producer of all dry beans (including pinto and navy), indicated a 10-percent decline in area planted;

"        Michigan, the second-leading producer in 2007 and the top source for black beans, plans to reduce seeded area 5 percent;

"        Minnesota plans a 13-percent reduction in dry bean area to 130,000 acresjust below the states average dry bean area over the past five years;

"        Colorado indicated a 4-percent increase in dry bean area for 2008. Pinto beans accounted for more than three-fourths of the states 2007 area;

"        Idaho expects to plant 80,000 acres of dry beans in 2007, down 11 percent from a year earlier. The share of seeded area accounted for by garbanzo beans is expected to decline from 46 percent in 2007 to 35 percent this year;

" Driven largely by strong Great Northern bean prices, prospective area in Nebraska, the leading source of Great Northern beans and the second-leading pinto bean producer, is expected to rise 14 percent in 2008.

Given the external market forces involved, the dry bean industry will continue to face this same competitive scenario over the next several years.

Given lower dry bean acreage this year and a return to average yields (which would be lower than a year ago), stocks will remain low and prices will remain strong relative to their historic levels to help maintain parity with other crops and preserve grower interest in dry beans. If yields are impaired by adverse weather this summer, the 2008/09 dry bean season average price could easily exceed the 1988 nominal dollar record high of $29.90 per cwt.

Exports Down One Percent

During the first 6 months of the marketing year (September 2007-February 2008), U.S. exports of dry beans declined just 1 percent from a year earlier to 3.9 million bags (cwt). Among the leading dry bean export classes, exports of Great Northern (up 35 percent), dark red kidney (98 percent), garbanzo (14 percent), and small red beans (20 percent) posted increases. With rising U.S. prices and dwindling exportable stocks, exports of black, pinto, and navy beans declined.

Despite higher prices, export volume has remained resilient this year despite reduced movement to the top two destinations
Mexico was down 36 percent and shipments into Canada fell 17 percent. Exports to the United Kingdom were up 27 percent due largely to greater navy bean shipments. Japan (up 1 percent), Spain, and Italy have also imported more U.S. dry beans this season. For all dry beans, the September-February 2007/08 average U.S. dry bean export unit value was up 15 percent from the previous year to 31.8 cents per pound.
Source: Vegetables and Melons Outlook/VGS-326/April 17, 2008. ERS-USDA

Pulse Outlook

Dry Beans: For 2007-08, exports are forecast to decrease from 2006-07 due to lower supply. Carry-out stocks are forecast to decrease to a very low level. The average price, over all classes and grades, is forecast to increase because of the lower total U.S. and Canadian supply and very strong demand. For 2008-09, the area seeded is forecast to decrease by 10% from 2007-08 because of good prices for crops which are easier to produce than dry beans. Production is expected to decrease by 4%, as the lower seeded area is partly offset by higher yields. Supply is forecast to decrease by 9% because of the lower production and lower carry-in stocks.

Chickpeas: For 2007-08, exports are forecast to increase from 2006-07 because of higher supply. The average price, over all types and grades, is forecast to decrease due to higher world and Canadian supply. For 2008-09, the area seeded is forecast to decrease by 40% from 2007-08 because of high carry-in stocks and relatively low prices compared to many alternative crops. Production is expected to decrease by 42% due to the lower seeded area and higher abandonment. Supply is forecast to decrease by 19% as the lower production is partly offset by higher carry-in stocks.

Source: Agriculture and Agri-Food Canada


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Northarvest Bean Growers Association | 50072 East Lake Seven Road | Frazee, MN 56544
Ph: 218-334-6351 | Fax: 218-334-6360 | Email: