Mexico’s bean trouble may open doors

Canada is expected to harvest its largest dry bean crop since 2006, just in time for demand from Mexico to start booming

There will be a captive market for the huge crop of pinto beans being harvested in Canada and the United States, says a commodity broker.

Sales to Mexico could triple in 2020-21, Dan Sturt, broker with DW Sturt & Co., told delegates attending the Canadian Special Crops Association’s virtual annual meeting.

Pinto seed was hard to find in Mexico in June, which meant farmers had to cut back on acres.

Producers in Chihuahua planted about 173,000 acres, down from the 235,000 that usually go in the ground.

But what is really going to hurt this year’s production is a severe drought in the state. An estimated 60 percent of Chihuahua’s crop has been lost.

“Their situation is going to open the door for quite a few pinto beans going into Mexico,” said Sturt.

The other main pinto growing state is Durango, where farmers seeded 494,000 acres of beans, down from the typical 543,000 acres. Three-quarters of those acres are pintos.

His sources in Mexico tell him to expect up to 2.5 million bags of demand for Canadian and U.S. pintos, a massive increase from the 700,000 bags imported last year.

Black bean demand out of Mexico is also expected to be robust, in the neighbourhood of 2.1 million bags.

“We have opportunities that we definitely need because we have some significant production of these classes of beans,” he said.

Statistics Canada is forecasting 364,500 tonnes of Canadian dry bean production, the largest crop since 2006.

Chuck Penner, analyst with LeftField Commodity Research, said most of the increase is in pinto and navy beans. Black bean production will be down from last year.

The U.S. Department of Agriculture is forecasting a record 1.49 million tonnes of U.S. beans. The biggest production increase is expected in the pinto class.

Penner said pinto and navy bean prices have plummeted in the U.S. market, down to the level of black beans, which haven’t budged much in years.

However, pinto prices and substitutes such as flor de mayo beans are on the rise in Mexico because of the short crop in that country.

Bean prices are also increasing in Argentina because of production problems in that country, which should create opportunities for Canadian and U.S. beans in Latin American markets, said Penner.

Marcos Mosnaim, senior trader with Globeways Canada, said Brazil had problems with its black bean crop and will be buying whatever is available from Argentina.

That means Argentina won’t be providing much competition to Canada and the U.S. in other black bean markets.

There is also a shortage of light speckled kidney and brown-eyed beans in Brazil, and pinto prices are on the rise there as well.

“Brazil and Argentina shouldn’t be competing with our crops,” he said.

Mosnaim said the pipeline for most classes of beans in North America is almost empty, so he doesn’t think prices will drop any lower.

Sturt agreed that there is a lack of supply for almost every class of beans with inventories at their lowest levels since the early 2000s.

Purchase orders and customer call volumes are extremely high. The supply situation probably won’t be rectified until December or early 2021.

Ethiopia is not expected to be much of a competitor in the navy bean market, and Europe is low on supply, so there should be good canner demand for navies and substitutes such as alubia and great northern beans.

“Navy bean demand should be very strong,” he said.

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