Dry Bean Contracts 2008
March 28, 2008
How are contracts developing compared to last year? Are growers still undecided? Are buyers getting enough acres? These are some of the questions put to buyers in February. As one buyer put it, We are competing for soybean and wheat acres; it is the same all over. As far as outlook prices, one buyer said it for everyone, prices are changing every hour of every day of every week.
Contracts have been challenging this season due to the fact that all commodity prices are very high and at historical levels. It is very competitive to get acres out there. Growers are thinking the willingness to commit to values and dry bean acres; acres are going to be down this year. I think growers are waiting until the end of spring to make the last of the determining factors in marketing and acres. Acres could be down because all commodity prices are very high right now. I think there are certain specialized classes of beans that are not very popular to grow. Cranberries are very high value because no one has been growing them. Light red kidneys are very high value because they are more challenging to grow. Some of the kidney beans, cranberry beans, different beans like that did not get the acres out in 07 and we will see what happens in 08
-- Brian, manager, Forest River Bean. Contracting pintos, pink and small reds.
I would say the number of pound contracts is fairly comparable to last year, just at a much higher level. We have been contracting all along since the end of October and I have been offering contracts at increasing levels since October. I just had several growers sign up a few more acres. We did a lot of contracts early but lately, it has been a trickle here the last month or two. We have a pretty solid core of acres in this area. My acres really dont fluctuate a lot. We are competing for soybean and wheat acres; it is the same all over. Really, we are up against everything; from sunflowers to corn it is a fight to get acres.
-- Dean, manager, Colgate Commodities. Contracting pinto, navy, blacks, pinks and great northerns.
Contracts are terrible this year. No one is signing because of high grain prices. It doesnt matter what prices you put out there now. Until the grain markets settle down and everything settles down farmers wont sign any contracts. It is getting late for us. We are not getting support from the end users either. They are claiming that they are going to wait and see what happens. I think what is going to happen is that they are going to wait until the March 31st grain report to find out how many dry beans that they are intending on planting and how many of these other crops, then they are going to see where they stand. It is almost going to be too late. Most guys would have already signed up a lot of their crops for growing already.
-- Ed - manager, Walton Bean. Contracting black, pinto, kidney and small reds.
Contracts are slower than this time last year. There is so much competition for acres that farmers are not 100% decided on what they are going to seed. They are letting these markets play out a little bit until we get closer to new crop. Most growers have an idea of what they are going to seed but they havent necessarily locked in their new crop contracts yet because the markets have been mostly trending upward. I think they are waiting to hit the top and also waiting to see if one commodity takes off more than the other. There might be some switching of acres that go on as we get closer and closer to the growing season. In a more normal marketing year, if new crop wheat wasnt $10-plus and soybeans at $11-12 new crop, I would say that the new crop contracts are definitely behind where they normally are.
-- Justin manager, JM Grain contracting pintos.
Prices are higher than last year because of competition from high wheat, soybean and corn prices. We contracted quite a few contracts earlier in August and that was a good thing for us. We locked in most of our acres at that time before the corn and soybean kicked in gear. Kidneys are holding their own but navies will be down.
-- Larry - manager, Bird Island LLC, MN. Contracting navies and kidneys.
We have gotten about half of last years contracts at this time. It is too early to tell if we are going to be getting enough acres. There is a lot of indecision yet on what to plant. Growers are watching the price, keeping an eye on what wheat and soybeans are going to do yet. No one wants to contract too soon.
-- Lynn manager, Miller Elevator, Valley City, ND. Contracting pintos.
Dry Beans: 2008 Looks to be a Positive Year
At the recent Devils Lake Roundup held in January, John Berthold, Walhalla Bean Company, gave a positive outlook for dry beans in 2008. Why would I want to grow dry beans in 2008? he asked the audience. Like everything else, the prices are the highest theyve been in 15 years in all major classes. For the balance of this year, he expects prices to remain firm. I dont see any indication at all to say that any of these bean prices are going to fall out of bid anytime soon, he said.
Different factors will be a positive influence on beans in 2008. 1) New varieties are being released with much improved yield potential. 2) Any production problems will rapidly move prices. 4) Demand is high as per capita use is increasing across all classes of dry beans. 5) It is a good rotational crop.
2007 Crop Review
Berthold said that last year overall was a very good year for dry bean growers in North Dakota and Minnesota. For some of the areas in the valley from Grand Forks to Walhalla, it was some of the best production years hes seen with 3,000-3,500 lbs per acre not uncommon. The last crop report we got pegged the ND yield at 16.5 bags per acre. That is a record yield for the state.
Expect stocks to increase over last year because last years stock was very minimal.
We went into the year with as low of a carry over in any class of bean that Ive ever seen, he said. In our company we physically shipped out our last bit of old crop the first week of Sept. Things were down to a very minimal amount of stock.
He finished by cautioning growers that beans have been consistently profitable but dont put your eggs in one basket and seed varieties are limited so check with your dealer early.