Analysts say a huge drop in American bean production will make carryover stocks more manageable, but will have a negligible effect on prices.
Farmers in the United States harvested 346,000 fewer tonnes of dry edible beans this year than they did in 1999.
The 23 percent drop in production means bean growers could be facing tight stocks of several types of beans by the time they seed the 2001 crop.
According to STAT Publishing’s newsletter, American growers will have a tough time getting their hands on adequate supplies of pink, small red, small white, blackeye cowpea and dark red kidney beans.
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But there was such a huge carryover of navy, pinto, black and great northern beans last year that even a massive drop in U.S. production will have little effect on bean prices.
Agriculture Canada analysts said bean prices averaged $505 per tonne in 1999-2000, down from $655 a tonne the previous year. Pinto, white pea, black and brown beans dragged the average down, but red kidney, cranberry and great northern beans were selling at above average prices.
Ivan Sabourin, vice-president of Roy Legumex Inc., said most varieties are still oversupplied, but he thinks the bean market has bottomed out and producers should see a gradual increase in prices this crop year.
“The market is discounting nearby shipments and putting a premium for further out. So I think everyone is in agreement that we’ve reached a point where we’re a little too low in terms of pricing for long-term sustainability,” Sabourin said.
“It’s not a huge difference, but there should be a slow grind upwards.”
Another positive development is the weaker the Canadian dollar. Most types of beans are traded in U.S. dollars, so a weak loonie means more money in producer’s pockets.
But other analysts aren’t so optimistic.
“We’re still sort of eating our way through that carryover,” said Blair Roth, special crops manager with Agricore.
“As that carryout gets chewed up, maybe we’ll start to see some optimism. But right now it’s kind of business as usual – no price rallies because there’s still so much stock around.”
Roth said last week the truck driver strike at the Port of Montreal was also diminishing hopes of a price rebound. The labor dispute, which ended last week, was upsetting shipments of beans to Europe, North Africa and the Middle East.
Sabourin said prices for great northern beans were particularly affected by the strike. Great northern is one of the few types of beans with decent prices. Canada exports manyto Muslim countries where they are eaten during the Ramadan holiday.
