Manitoba Dry Bean Post-Harvest Market Outlook
November 23, 2005
All in all, the Manitoba dry bean crop looks well-below average in terms of yields and quality levels this year. Many acres were lost entirely amidst last June's heavy rain, and those fields that came through have been yielding just 700-800 lb/ac.
Harvest isn't yet complete in Manitoba but at this stage (mid-Oct), it's believed that the year's best bean crops are already in the bin, and that crops still standing will yield much lower than what's been seen so far. Anyone with beans not yet harvested likely didn't get them seeded early, or faced some other problem that caused the crop to mature unevenly. Highly variable plant maturity levels within fields can lead to a high percentage of immature green beans in the sample, or lots of splits. Either way, it causes yields to suffer.
That said, supply levels in Manitoba don't matter too much to buyers of most types of beans, with Ontario and the U.S. having produced ample crops this year. This has caused North American dry bean markets to weaken as harvest progresses, with no major production problems having been seen this season with the exception of many drowned-out fields in southern Manitoba earlier this spring.
With the market having factored these losses into their new-crop bids long ago, harvest pressure is having the typically weak effect on spot prices. Even though local supplies aren't large, the lack of a need for Manitoba-origin beans into many of the main destination markets will keep a lid on prices this year.
That said, the markets for different types of beans move in response to their own unique factors. All in all, the outlook for dry bean prices is fairly weak for 2005/06, but the chances of any particular sub-type to rise later on may differ. These dynamics are discussed in more detail below.
Pinto Beans: The pinto bean outlook is particularly weak due to more than adequate supplies out of Ontario and the U.S. to meet typical demand. Currently historically low prices reflect this. It's arguable the market is bottoming amidst harvest pressure, but it's also clear that a significant increase in export demand is needed to alleviate the heavy North American supply situation. This means that the length of time it takes for pinto prices recover might be longer than what can be expected for other types of beans.
Navy Beans: Navy bean price prospects are worsening, after being buoyed earlier in the fall due to a couple of local buyers being caught short against their early-season sales. With harvest having progressed elsewhere amid good conditions, and yields coming in above earlier expectations, bids for navies in Manitoba have dropped hard since that time, despite the fact no meaningful amount of production will be available locally. However, due to overall stable demand and a surplus less burdensome than for some other types of beans heading into the 2005/06 marketing year, there is at least a chance of the market tightening come next spring and prices rising in response.
Black Beans: The outlook for black beans is the only one looking remotely positive as of mid Oct. In addition to the virtually nil crop from Manitoba (where 25-30,000 acres are normally grown), little production will come out of the Minn-Dak region, leaving the market almost totally reliant on the Michigan black bean crop. At this stage it looks to be in fine shape, but a weather problem developing during harvest, or yields coming in below expectations, would set the market up for the possibility of a short-covering rally come spring.
Kidney Beans: Dark red kidney beans are still holding at pre-harvest levels in Manitoba, but light red kidney bean prices have dropped a couple of pennies. Because of last year's problems, and due to the fact important quality parameters of dry beans like color deteriorate over time, some buyers are pricing old-crop kidney beans at a penny discount, now that new-crop supplies are available (and due to the fact crop supplies and quality levels have come in at good levels in other producing regions).
Growers should also be aware that even though there's been strong growth in interest and local processing of Manitoba dry beans, good markets may exist just outside the province too. From time to time, it's worth calling outside the local market area to ensure Manitoba delivered bids are in line with what's available in the U.S.
From Louis Dreyfus Canada Ltd, which provides informative market updates and analysis on a number of crops, including dry beans, online at www.louisdreyfus.ca/index.shtml. Click on one of the terminal locations.