April 15, 2004
Deferred price contracts and increasing global competition have taken the volatility and thus some of the potential for profit out of the pinto market, says Steve Brown, general manager and partner, Jacks Bean Company, LLC, Holyoke, Colo.
Brown has been involved in the operation of Jacks Bean Company since 1974 under several different owners. He is secretary/treasurer of the Colorado Dry Bean Administrative Committee and the National Dry Bean Council and is chairman of the NDBC finance committee. He spoke at Bean Day on factors driving the pinto market.
Deferred contracts impact the market because processors dont have to buy the beans, but they control when they will go on the market, he says.
An increase in world trade and global competition particularly from the Southern Hemisphere are impacting the market because they shorten the cycle between new crops available to U.S. processors. It used to be a 12-month cycle. Now, a new crop from South America will be on the market six months after the U.S. harvest.
The Rocky Mountain bean industry has changed dramatically as a result of these and other factors, he says. The five-year moving production average for Colorado, Nebraska, Kansas, Wyoming, New Mexico and Texas has declined 21.1% for pinto beans and 35.5% for all dry beans over the past 13 years. Colorados five-year moving average for production shows a decline of 47% for pintos and 42.3% for all dry beans. Colorado population growth and the shift to program crops that are more profitable, less risky and easier to grow also have contributed to the decline in pinto acres.
The big decrease in acres in the Rocky Mountain region is over, Brown says, but production probably wont ever come back to previous levels.
Remaining growers and dealers have established niches bright color and large seed, Colorado origin and truck load shipments for limited production, he says. Jacks Bean Co. has diversified into light red kidney beans and popcorn.
The Northarvest region has emerged as the leading production area for pintos. The five-year moving area for the last 13 years for Northarvest and Wisconsin shows a 79.7% increase in dry beans production and a 94.3% increase in pinto production, Brown says.