Growers are advised to keep an eye on the recent commercial introduction of genetically modified beans in Brazil
Brian Clancey expects more of the same in dry bean markets in 2019-20.
There have been no big developments on either the supply or demand side of the balance sheet.
Brazil is the one country that can really ignite the bean market.
“If they have a disaster they’ll suck up all the production from Argentina and then all the markets Argentina would have otherwise supplied will have to come to North America,” said the editor of the Stat Publishing newsletter.
But a disaster doesn’t appear to be in the cards, according to a recent U.S. Department of Agriculture report.
The USDA is forecasting 3.02 million tonnes of production in 2018-19, which would be slightly below the previous year’s 3.12 million tonnes.
Brazil’s bean imports are up 130 percent in the January-through-June 2019 period compared to a year ago due to the smaller crop. Argentina has been the main beneficiary of the increased business.
Clancey said Argentina produced a top-notch bean crop this year.
“Exporters in Argentina and bystanders in Argentina say that the quality of their black beans is equivalent to a Michigan No. 1 but their prices are lower, so they’re taking away some export demand,” he said.
North American production remains steady from year-to-year. Stat Publishing is forecasting 2.44 million tonnes of production of all classes of beans, which is about four percent below the previous five-year average.
Dennis Lange, pulse specialist with Manitoba Agriculture, said growers in his province planted 150,000 acres of dry beans, which is well above the typical 120,000 acres.
“We haven’t seen those kinds of numbers in a few years,” he said.
The driver was poor soybean yields the past couple of years. Growers along the diagonal line between Portage la Prairie and Altona switched some soybean land into dry bean production.
Lange estimates Manitoba growers seeded 50,000 acres of pintos, 40,000 acres of navies and 27,000 acres of blacks.
He said the crop got off to a good start. There has been some insect and wind damage but there is no disease issues as of the start of podding.
“Things are looking pretty good. If it continues like this, I would expect we would see some very comparable (yield) numbers to last year,” said Lange.
The average yield over all classes grown in Manitoba last year was 1,674 pounds per acre. That compares to the five-year average of 1,777 lb. per acre, which was bolstered by a whopping 2,100 lb. average in 2017.
But the U.S. crop sets the tone in the North American bean market.
“The crops in the U.S.A. are looking good,” said Clancey.
Grower prices in Canada tend to follow what is happening south of the border but there is one other significant factor.
“Currency matters more than anything,” he said.
“If you know where the dollar is going to go that tells you where grower bids are going to go.”
Clancey said the bean market is opaque with a lot of business happening under long-term contracts between processors, canners and packagers.
The lack of transparency is preventing growers from planting as many acres as they could in North America.
One thing for growers to keep an eye on is the commercial introduction of genetically modified beans developed by Brazil’s Agricultural Research Corp. They are slated to enter the market during the 2019-20 crop year.
“(They) will likely contribute to higher yields and production,” stated the USDA in its Brazil report.
Another trend to watch in Brazil is declining per capita bean consumption. Industry sources peg consumption at 15 kilograms per person in 2019 versus 26 kg per person in the 1970s.
“One reason for the fall in per capita consumption is an increase in the population’s income, causing a substitution of their sources of protein (beef and poultry) and a decrease in the relative prices of substitute foods,” said the USDA report.