Despite “strong market disincentives,” the United States Department of Agriculture expects a 10 percent increase in U.S. dry bean acreage in 2004.
In an outlook published on Feb. 26, the government agency gave no rationalization why U.S. acreage would rise, focusing instead on market factors that should be having the opposite effect.
Sluggish prices for most dry bean classes and favourable prices for competing crops like soybeans and corn were the main reasons noted.
But the report also talked about “confusion and hesitation” surrounding low-carbohydrate diets having a negative impact on bean consumption, which has fallen three percent in the first four years of this decade compared to the same period in the 1990s.
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That said, the USDA is still predicting an increase in plantings of navy, black, dark red kidney, cranberry and pinto beans.
The increase in harvested acres will be somewhat smaller than the 10 percent rise in seeded area because an unusually large percentage of the crop was harvested in 2003.
Manitoba Pulse Growers Association director Dan Penner thinks the agency’s forecast is misguided.
“Soybeans have been going through the roof and there’s a lot of growers that I’ve heard of and talked to that say they’re not going to grow any edible beans this year.”
Strong corn prices will also drive a lot of acreage out of production south of the border.
Penner expects acreage to be down between eight and 10 percent in Manitoba, with similar declines in North Dakota and Minnesota, which should firm up edible bean prices this fall.
If the USDA’s estimate turns out to be correct, growers will see more of the “flat, flat, flat” bean prices they have been experiencing this year or even a price erosion, he said.
The outlook also offered lentil and pea predictions.
It forecast a four to eight percent rise in lentil acreage due to a second consecutive year of strong prices, and a hike in pea acres of more than 25 percent.
Saskatchewan Pulse Growers chair Shawn Buhr wonders how much the U.S. loan deficiency payment subsidy influenced expectations for a larger pea crop.
“There’s a fair bit of probability that’s what is driving it.”
U.S. dry pea farmers received $13.7 million US in loan deficiency payments in 2003. About half of the payments went to producers residing in North Dakota. There were no subsidies for lentils, while $107,000 was doled out to chickpea growers.
Buhr doesn’t believe a 25 percent increase in pea plantings would be market distorting.
“It seems like a big increase but they are starting with a relatively low acreage.”
While U.S. growers will take government payments into consideration when deciding what to seed this spring, Canadian producers will be relying on market signals, which are telling them to plant more peas.
Buhr said soybean prices are “sky high” and that is having a bullish effect on competitive feed ingredients like peas.
With lentil prices above the 10-year average, he expects more reds to go in the ground this spring but thinks greens will remain static because there are other factors to consider.
“If you’re in a severe grasshopper area, you’ve really got to think twice. Lentils become very high risk,” said Buhr.
