Big crop weighs on dry bean market
Dealer says growers sitting on supply until prices improve
By DAVE WILKINS
A big increase in U.S. dry bean production is weighing on prices, and growers appear in no hurry to sell.
National production of dry edible beans is estimated at 32.6 million hundredweight, an increase of 29 percent from last year, according to USDA.
Output is expected to increase this year for at least eight dry bean classes including pinto, navy, Great Northern, black, garbanzo, pink and dark red kidney, based on acreage and projected yields.
Prices are about 20 percent below last year, and it appears that many growers would rather store their beans this fall than sell them.
"At these low price levels I think most growers have decided to carry their beans over into next year and see if the market improves," said Carter Wilson, a bean dealer with J.P. Wilson Co. in Twin Falls, Idaho.
"A lot of these beans will store well, especially here in the West. They may not be marketed until midsummer or early fall next year if this market doesn't come up," he said. "The trade is viewing this as a two-year marketing scenario."
As warehouses and elevators began swelling with dry beans in September, USDA released a preliminary farm-level price estimate for the 2010-11 marketing season of $24.10 per hundredweight -- 21 percent below a year earlier.
In October, grower prices for small red and pink beans in Idaho and Washington averaged about $25 per hundredweight -- a drop of 19 and 21 percent, respectively, from year-earlier levels.
The depressed market, coupled with more attractive prices for competing crops such as wheat and corn, is expected to lure many growers away from dry beans next year, Wilson said.
Farmers who grew dry beans for seed this year may be in a little better shape. Seed companies generally contract with growers and pay a premium of about $2 to $3 per hundredweight above edible bean prices.
Idaho farmers harvested an estimated 2.5 million hundredweight of edible dry beans this year, an increase of 24 percent from 2009.
Growers in Washington state harvested an estimated 1.4 million hundredweight, an increase of 27 percent from a year ago.
Output in North Dakota, the nation's largest dry bean producer, is estimated to be 12.3 million hundredweight, a jump of 44 percent from last year.
It could take the market some time to work its way through the huge North Dakota crop. Increased exports to Mexico or stepped up government aid purchases for distressed areas such as Haiti would help.
Barring that, the market probably isn't going to improve much in the short term, Wilson said.
"I don't see this market turning around for another 90 days at least," he said.