A crop wreck in Argentina and smaller crops in the United States and Canada are supporting North American bean markets.
D.W. Sturt & Co., a U.S. brokerage firm, was initially forecasting a 20 percent decline in harvested acres in the United States and a 16 percent contraction in Canada for the major bean classes.
However, the numbers are going to be worse than that in the U.S. because of seeding problems in North Dakota and Minnesota caused by excessive moisture.
“I would say 10 percent of the acres in North Dakota did not get planted,” said Kim Vance, a commodity broker with D.W. Sturt.
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Growers struggled to plant the crop in the state’s Northern Valley, Fessenden and Devils Lake regions.
“The big areas that didn’t get planted were the pinto and black areas,” he said.
Vance thinks Minnesota and North Dakota will harvest 280,000 acres of pintos, down from the original estimate of 340,000 acres.
Growers were able to seed what they intended for the other classes of beans because they were planted outside of the waterlogged areas.
Vance said the crop that was planted in the U.S. is faring well.
“It got off to a rocky start, but the weather the last 10 days has been very favourable,” he said July 10.
“There is plenty of moisture, the heat has come on and it’s coming along great.”
The U.S. Department of Agriculture says 55 percent of North Dakota’s bean crop and 64 percent of Minnesota’s crop was rated good to excellent as of early this week.
However, there is considerable risk that the bean crop in both states could succumb to frost damage.
“We need every day we can get in order to harvest this crop,” said Vance.
“One-third of the acres in North Dakota would probably be susceptible to frost if we have an average frost date or earlier.”
D.W. Sturt is forecasting 234,000 acres of Canadian beans, including 95,600 acres of navy beans, 61,400 acres of pintos and 20,500 acres of blacks.
Argentina’s bean crop failure also lends strength to a variety of classes of North America beans.
Camara de Legumbres de la Republica Argentina (CLERA), an umbrella group representing Argentina’s legume industry, has declared force majeure with respect to the country’s bean crop.
It has taken the rare step of informing the International Pulses Trade and Industry Confederation (IPTIC) that producers and sellers of beans will be unable to meet their delivery commitments.
“It’s the first time I’ve ever seen it,” said Stat Publishing editor Brian Clancey.
CLERA said the situation is so dire that growers may not be able to harvest enough seed to plant next year’s crop.
“The present season is the worst suffered by the Argentine bean origin,” said CLERA in its statement to IPTIC.
“There is no available history of a drought as damaging, widespread and persistent as this one.”
The provinces of Salta and Jujuy in northwestern Argentina have declared states of agronomic emergency. Salta accounts for 80 percent of the country’s bean production.
Clancey said Argentina isn’t a huge bean producer, but it is probably the world’s largest exporter of alubia beans, which are large calibre white beans. They are shipped to Europe and the Middle East.
Prices for white beans in Egypt and China are soaring in response to Argentina’s crop failure.
“Because of the high price and the shortage, demand starts to filter down to smaller calibre white beans,” he said.
“The next one that will benefit will be great northern beans and then after that at the very bottom would be things like navy beans. There the benefit could be nominal.”
The price rally won’t last forever because Chinese growers have had time to respond to Argentina’s crisis. They have reportedly boosted acreage devoted to white beans.
Argentina also grows black beans, which are typically sold in local markets such as Brazil, which also had a poor bean harvest.
“With the shortage of black beans in Argentina, coupled with some disappointment with the crop in Brazil, they’re scouring the world for black beans,” said Clancey.
U.S. bids for great northern beans have risen to 45 cents per pound from 42 cents at the start of April. Prices for black and navy beans haven’t gained much strength from Argentina’s misfortunes.
Clancey said North America’s bean markets are “in a world of their own.” There is so much domestic demand for the product that exports are kind of an afterthought.
However, Argentina’s situation is providing underlying strength to North American bean markets.
Processors will import beans from around the world when the price is right, which keeps a cap on North American bean prices.
“When you have the world market getting hot like this, then that becomes less of a moderating factor,” said Clancey.
