Bean trade war unlikely to boost prairie acres

The European Union slaps a tariff on dry edible beans in response to American tariffs on steel and aluminum

REGINA — Dry edible bean markets have been rocked by a trade war between the United States and the European Union.

The EU has applied tariffs on a variety of U.S. beans and about 200 other goods worth US$3.2 billion in response to U.S. tariffs on EU steel and aluminum.

Cindy Brown, president of Chippewa Valley Bean in Wisconsin, said beans made the list because Wisconsin is the home state of House Speaker Paul Ryan, and it is a big bean growing state.

Navy and kidney beans are among the types of beans that made the EU’s tariff list, and that poses a huge problem.

Brown noted that the EU consumes 60 percent of the world’s navy beans while the U.S. is responsible for 62 percent of the supply.

It’s a similar situation with dark red kidney beans. The EU represents 73 percent of global demand while the U.S. accounts for 67 percent of production.

“We have a huge question mark of what’s going to happen,” Brown told delegates attending the 2018 Pulse and Special Crops Convention.

“Will people quit consuming the beans? Will we have a shortage? We have yet to see.”

As well, if U.S. beans still make their way into the EU marketplace, will growers be paying the tariff or end users or both?

It’s also unclear if this will lead to an increase in Canadian bean acres next year.

Keven Sawchuk, a senior merchandiser with Viterra, doubts there will be a big response from Canada.

Canadian bean production has remained stagnant at about 300,000 tonnes a year for nearly two decades. Growers don’t tend to respond to rising prices.

“We’ve had those price signals a number of times since 2000 but with quite limited impact on Canadian acres,” he said.

That is largely because beans can be grown only in certain regions of Canada because of the need for higher-than-normal heat units and frost free days than other crops.

He believes the bigger acreage response will come from countries such as Argentina, Ethiopia and Kyrgyzstan.

Scott Cottenden, food products manager with Thompsons Ltd., said bean processors need more certainty before contracting more acres next year because tariffs can disappear as fast as they arise.

Ivan Sabourin, sales manager with Ilta Grain, said he has already received emails from European canners that he doesn’t usually hear from.

“There is going to be a short-term benefit to processing north of the border,” he said.

Richard Duty with Trinidad Benham said trade wars usually last six to 12 months, but in the U.S. there is no normal anymore.

“This could continue to grow and get worse,” he said.

Brown provided brief market outlooks for all classes of beans.

She said the supply of speckled beans (including pintos) from exporting nations is 569,000 tonnes, which is well below the three-year average of 700,000 tonnes.

The U.S. and Canada will carry out another 160,000 tonnes from the 2017 crop, but with the reduced 2018 crop, that carryout will be gone by the end of 2018-19.

Black bean production among the major exporters is four percent below the average of about 500,000 tonnes.

However, there was solid production from the major importers — Mexico and Brazil — which is why Brown is anticipating 50,000 tonnes of black bean carryover in the U.S. and Canada.

Navy bean production from the exporting countries is estimated at 10 percent below the three-year average of 300,000 tonnes, but carryover from 2017 is 73,000 tonnes.

White bean production is close to the average of 325,000 tonnes. The biggest exporter, Argentina, is reporting no carryout from 2017.

Dark red kidney supply is 10 percent below the average of 135,000 tonnes. Unsold stock is difficult to find. By this time next year there won’t be much of the crop around.

Light red kidney production is 10,000 tonnes below the average of 60,000 tonnes, and anticipated carryout is less than 2,500 tonnes.

Cranberry bean supply among the major exporters is 80,000 tonnes, which exceeds the average following two years of below-average output.

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