A big drop in North American dry bean acreage and production problems around the world should provide some price support to the crop, according to an analyst.
Statistics Canada is forecasting 230,000 acres of beans, down 12 percent from last year.
The U.S. Department of Agriculture expects 1.56 million acres, a 12 percent drop from 2015.
But as Brian Clancey, editor of Stat Publishing notes, this year’s U.S. estimate is missing numbers from Arizona, Kansas, New Mexico, New York, Oregon, South Dakota and Wisconsin.
He believes adding those states back in would bump up plantings to 1.62 million acres and reduce the drop to eight percent.
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Chuck Penner, analyst with LeftField Commodity Research, said that’s still a big reduction in North American beans.
“It’s more of a drop than I had expected,” he said.
“It will be positive for the market. Having fewer beans out there will support prices.”
That is already happening south of the border.
“(Prices) have been edging higher in the States but at the same time as that has been happening our dollar has been strengthening, so our prices here have been basically flat,” said Penner.
Clancey sees a 7.6 percent drop in U.S. production in 2016, which would be supportive for prices.
The USDA did not provide a breakdown of acreage by class of bean but in a recent article on the Stat website Clancey estimated land in black beans will be down significantly with smaller reductions in pinto and navy beans.
Another factor propping up prices is the ongoing problems with the Mexican crop. They began with the summer crop, which accounts for three-quarters of Mexican bean production.
The U.S. Dry Bean Council estimates drought cut summer production to 800,000 tonnes, well below the initial projection of 1.1 million tonnes.
There was also quality damage in key bean growing states of Zacatecas, Durango and Chihuahua.
Penner said farmers are wrapping up harvesting the winter crop, which has also faced production challenges.
“They didn’t recover much based on that,” he said.
Mexico recently expanded its quota for bean imports from non-NAFTA countries to 150,000 tonnes from 100,000 tonnes.
“They recognize that they have a shortage, so bean prices have been rising in Mexico. I think there is a little more strength possible in the old crop side,” said Penner.
Canada exports few beans to Mexico but the U.S. does and Canada gets the spillover effect by restocking U.S. supplies.
There are also potential problems looming in Argentina, an exporter of white alubia beans.
Harvest rains have damaged Argentina’s soybean crop. Penner said the dry bean growing area is in the northwest region of the country where the rains were not as heavy but there could still be quality damage.
“We’re still trying to figure out what impact the rains will have,” he said.
One long-term threat for bean growers is China’s decision to eliminate its corn price support program.
That could eventually cause Chinese growers to shift some corn acres into other crops such as beans.
Clancey noted in another recent article that Chinese bean plantings that peaked at 3.56 million acres in 2002 have plummeted to an estimated 2.19 million acres in 2016 due to stiff competition from corn.
China exported 499,000 tonnes of beans in 2015, with kidney beans accounting for almost two-thirds of annual exports followed by mung beans and small red beans.
That export total could grow in coming years if acreage and production rises but Clancey believes it may take a couple of years to push plantings back up to 2.5 million acres.
