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Northarvest Market Outlook
August 21, 2008

Prices Remain Strong - the May 2008 U.S. aggregate dry bean grower price was estimated to be 49 percent above the strong level of a year earlier. Preliminary price estimates were higher than a year earlier in almost every major State, reflecting dwindling stocks and high field crop prices. California is a possible exception but actual numbers remain unknown as limited sales have prevented dry bean prices from being reported in the state since February. Grower prices in North Dakota, the top producing state, were up 39 percent from a year earlier. This was the smallest gain among the reporting states, reflecting the sizeable pinto bean crops last fall and subsequent larger stocks on hand. With grower intentions to plant fewer corn acres exacerbated by spring flooding and cool weather in the Corn Belt, field corn prices were approaching $8/bushel in mid-June. With both corn and soybean supplies likely to remain tight and prices high well into 2009, further upward pressure on dry bean prices is likely over the next year.  In 2007/08, the current dollar (unadjusted for the effects of inflation) season average grower price for all dry beans was estimated to be $26.40 per cwt. In the coming year, the current dollar season-average dry bean price should easily exceed the $29.90/cwt record high set during the drought year of 1988.

However, after adjusting this 2008/09 expected record-high price for the effects of price inflation over time, the 2008/09 adjusted price remains well below the inflation-adjusted (expressed in 2000 dollars) $36.28/ cwt of 1989 and even further from the 1973 inflation-adjusted $85.72/cwt.

With Dollar Down, Exports Flow With the weak dollar and steady food aid demand offsetting the impact of higher dry bean prices, U.S. export volume for dry edible beans was up 14 percent to 5.5 million cwt during the first 8 months of 2007/08. With 4 months remaining, volume has already exceeded the low quantity shipped during 2004/05 and appears poised to easily surpass last years total and approach the strong 7.6 million cwt shipped in 2005/06.  Great Northern beans have led the way this season, with support from dark red kidney, garbanzo, and miscellaneous beans. The volume of pinto bean exports has remained about steady with that of a year earlier. Through April, export movement of Great Northern beans was up 106 percent from the previous year with increased movement to
Turkey, France, and Italy. Through April, Mexico was the top market accounting for 20 percent of U.S. export volume, down from 29 percent a year earlier. The

volume shipped to the United Kingdom, the third leading market, was up 57 percent during the September-April period with navy beans accounting for 79 percent of the  volume despite a 24-percent increase in the unit price for navy beans.


: Pulse and Special Crops Outlook - For 2008-09, total area seeded to pulse and special crops in Canada is expected to rise marginally from 2007-08, as higher areas for dry peas, lentils, and mustard seed are partly offset by lower areas for dry beans, chickpeas, canary and sunflower seed. Statistics Canada (STC) recently released its preliminary estimates of principal field crop areas for 2008, which provided estimates for all pulse and special crops. It is assumed that precipitation will be normal for the growing and harvest periods, and that the abandonment rate and quality will be normal. Trend yields are assumed for both western and eastern Canada.  Total production in Canada is forecast to increase marginally to 4.7 million tonnes (MT). Total supply is expected to fall marginally as lower carry-in stocks are partially offset by the increase in production. Exports are forecast to decrease marginally due to the lower supply, while domestic use is expected to remain relatively unchanged. Carry-out stocks are expected to fall to historically low levels for most crops. Average prices, over all types, grades and markets, are forecast to increase for 2008-09 for all pulse and special crops, with the exception of dry peas. The main factors to watch are growing conditions in Canada, the U.S., the EU, Australia, the Middle East and the Indian subcontinent.


Dry Beans - For 2008-09, production is unchanged but supply is forecast to fall due to lower carry-in stocks. Production is expected to be relatively unchanged for all the major classes of dry beans - white pea, pinto, black, dark and light red kidney, and cranberry, Great Northern, pink and small red. Canadian exports are forecast to decrease due to the lower supply. Carry-out stocks are also expected to remain unchanged. U.S. production is forecast to fall to below 1.0 MT, largely due to lower seeded area in North Dakota. The average price, over all types and grades, is forecast to increase because of the lower North American supply.

Chickpeas - For 2008-09, production and supply are forecast to fall sharply due to a 50% decrease in seeded area. Production is expected to fall for all types - desi, large kabuli and small kabuli. Canadian exports are forecast to increase despite the lower supply. Carry-out stocks are also expected to fall sharply. The average price,
over all types and grades, is forecast to increase due to the lower world and Canadian supply. Source: Canada Pulse and Special Crops Outlook 2008-09, July 2008

Argentina Crop Report - In 2008, dry beans planted in Argentina totaled 237,000 Ha or 585,390 acres with alubia and black beans taking up almost 82% of the total acres. As of July, the white bean harvest still had a long way to go before completion while the black bean harvest was just wrapping up. Quality and yields on both beans were good-to-excellent, with good color and very few defects. Quantity appears to be smaller than usual, estimated to be about 20% less than last year. Bean moisture levels were lower than usual due to unseasonably warm temperatures. Light red kidney, cranberry, limas and dark red kidneys are also a staple crop of Argentina but production is small. Overall, the beans quality and yield were reported to be good. As with some areas in the U.S., the crops appear to be having moisture concerns. Some of the beans appeared to be having color issues due to moisture damage. It is estimated that cost of production for dry beans has doubled over the last three years, from $300 U.S. to $600 per hectare. Overall, the crop quality of the dry beans in Argentina appears to be smaller than usual, estimated to be about 20% less than last year. I was told that the Brazilians had a bad second crop of black beans and are moving quickly to shore up their supplies of black beans and alubias. With smaller than usual crops of both alubias and black beans, it is expected that Argentine exporters will first focus on their best customer, Brazil, before looking to other export markets, says Randy Duckworth, director of worldwide activities and representative for the Central America and Caribbean regions for the USDBC. Argentina exported approximately 70% of its black beans to Brazil last year. With the short Argentine black bean crop and poor Brazilian second harvest, Duckworth   estimates that this percentage will almost certainly increase significantly this year. On top of that situation, the government has been accused of being slow in  processing export paperwork which frustrates exporters.



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Northarvest Bean Growers Association | 50072 East Lake Seven Road | Frazee, MN 56544
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