With less acreage planted and a late harvest, industry experts are estimating below-average production this year. IFT reports on the latest from each region.

By Dario Bard

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At the U.S. Dry Bean Convention held in Chicago last July, representatives from each regional dealer association presented bean production estimates totaling 21 million cwt.

“Historically, that’s a small crop,” says Richard Duty, a bean trader with Trinidad Benham and a board member of the Rocky Mountain Bean Dealers Association.

In 2012, bean production came in at 30 million cwt, a harvest Duty characterizes as “abnormally large.” He suspects this year’s modest estimates may be due to the downward pressure on prices exerted by a plentiful supply; this made it more difficult for the industry to contract acreage this year. In 2012, 1.7 million acres of beans were planted compared to 1.2 million in 2013, according to dealer association calculations.

With the harvest still in its final stages and the USDA’s October crop production report cancelled due to the U.S. government shutdown, it is difficult to get a handle on production numbers. It appears, though, that due to rain delays in the major bean growing states, final production is unlikely to exceed the 21 million cwt estimate. The USDA plans to release its numbers on November 8, but Duty is skeptical about their reliability.

Read the USDA November Crop Production Report by clicking HERE.

“Given the shutdown and the late harvest, I wouldn’t have as much confidence in the USDA report this year,” he says, noting that the Rocky Mountain Dealers Association conducts its own canvas of processors at the end of every harvest to gather information on yields and overall production.

“Normally, the post-harvest letter we send them would have gone out by now,” says Duty, “but this year, due to this drawn out harvest, we are holding off till November 15; we don’t think anyone will have all the information before then.”

In order to provide readers with a timely insider’s look at the 2013 U.S. bean harvest, IFT checks in with bean dealers to see where things stand.

The North Central Region

The North Central Region, comprised of the states of Minnesota, North Dakota and Wisconsin, accounts for more than 65% of the nation’s pinto bean production, and the majority of its navy, black and kidney beans. At the U.S. Dry Bean Convention held in Chicago this past July, Darryl Berg of the Walhalla Bean Company represented the North Central Bean Dealers Association and presented a production estimate of 8.6 million cwt.

Asked recently how the harvest was going, Berg says, “For the most part, it’s a little above the estimate I gave in Chicago. Across all classes, we are seeing average yields that are higher than we expected by 100 to 200 pounds per acre.”

Much of the crop was planted late, but concerns about an October frost never materialized. For pintos and navies, however, Berg estimates that 5 to 15% of the crop is still in the fields.

“The situation for dark red kidney beans is not good,” he notes. “There are quite a bit left out there.”

The harvest has been hampered by almost continuous rains in October. As a result, Berg says quality is average at best.

“The crop planted early was fine, but let’s face it, we are harvesting in October, so we got typical October beans; they are discolored from the moisture and sunlight.”

Carryover numbers for the region were unavailable at the Convention, but since then the Upper Great Plains Transportation Institute has released stocks-on-hand numbers for all classes except kidney beans. The carryover situation is summarized in the table below, along with price information provided by Berg:

CARRYOVER & PRICES BY BEAN CLASS AS OF JULY 31
BEAN CLASS BAGS (cwt) PRICE PER BAG
Navy 876,000 US$ 36
Pinto 2,234,000 US$ 38
Black 932,000 US$ 39 to US$ 40
 

With respect to prices, Berg points out, “You have to keep the prices of other commodities in mind. Corn is below US$ 4 a bushel. Dry beans and corn are worlds apart, but you still have to look at your income per acre, and at this moment, in terms of revenue, the big dog on the block is dry beans, so you’re likely to see more willing sellers at these levels. It’s pretty good money right now compared to other commodities.”

The Rocky Mountain Region

Todd Curtiss of the Yellowstone Bean Company represented the Rocky Mountain Bean Dealers Association in Chicago and presented a production estimate of 5.8 million cwt. The Rocky Mountain Region encompasses the states of Arizona, Colorado, Kansas, Montana, Nebraska, New Mexico, Texas, Utah and Wyoming. This region is the country’s biggest Great Northern bean producing area, with more than 85% of Great Northerns grown in this region, mostly in Nebraska.

The harvest is still ongoing, according to Duty. “I would ballpark harvest progress at 90% in western Nebraska,” he says. “In some areas, we are getting good yields and quality, but we are not seeing that across the board.” Duty characterizes the overall yield and quality picture as “not great.”

“Weather is really impacting the Great Northern market,” says Duty. “There is a lot of pressure on the white bean complex because there’s a worldwide shortage, and so we are seeing the market react to these developments. I’m not hearing of anyone making offers in the market at this point.”

Duty expects that, one way or another, the harvest will come to its conclusion by mid-November.

“In years like this, as it gets later and later, some fields will have just suffered too much and will get plowed under and insurance will be taken up on them. I think we’ll see that happening at the end of this harvest, as the quality deteriorates to the point that nobody wants it.” Bean quality depends on a nice dry down, explains Duty. “Each time it gets wet again after it dries down, it’s going to do things like discolor or sprout or any number of other things that are deleterious.”

The carryover situation in the Rocky Mountain Region is tight for Great Northerns. In the face of the worldwide white bean shortage, Duty reports seeing some buyers switch over to lima beans.

“It’s unusual to switch from a kidney-type bean like an alubia or a Great Northern to a broad bean, but that’s what we are seeing. Because of the white bean shortage, there is spillover into limas simply because they are large and white. The bigger picture right now is that anything that is white is precious. So navy beans are strong and so are Ethiopian pea beans.”

Duty sees a similar situation developing for dark red kidney beans, although to a lesser extent.

“There’s a shortage there, too. The word out of China is that they’ve cut way back, so, like with whites, we are seeing some spillover into other classes with reds, but to a lesser extent.”

Michigan

Michigan is a major producer of black, navy and small red beans.

“Harvest is about over and it’s been excellent,” reports Michigan Bean Commission Executive Director Joe Cramer. All told, 180,000 acres of beans were harvested, including 75,000 acres of black beans, 55,000 acres of navies and 14,000 acres of small reds. Yields averaged between 19 and 20 bags per acre and Cramer estimates total production at 3.4 million cwt.

In terms of carryover, Cramer describes it as minimal. “We are all but cleared out in every class except small reds.”

Idaho

In Chicago, the Western Bean Dealers Association, covering the State of Idaho, was represented by Craig Kelley of Rangen Commodities. Idaho is renowned for its chickpea and pinto production. In July, Kelley presented a production estimate of nearly 1.6 million cwt for Idaho.

As in other regions, the harvest has yet to conclude. “We are at 99%; we should have it wrapped up by the end of October,” says Kelley. He expects some acres will be lost due to rains and cold temperatures. “We are seeing average and above-average yields,” he says, adding that he expects the above-average yields to make up for the lost acreage. Overall, he expects final production to come in slightly under the 1.6 million cwt estimate he presented in Chicago.

The carryover situation is at zero for most bean classes, with a minimal amount for pintos. Kelley says prices have remained relatively steady.

California

Nelson Parreira of Beans R4U, Inc., represented the California Bean Shippers at the Convention and presented a production estimate of nearly 1.2 million cwt. California grows mostly black-eye peas, chickpeas and baby and large lima beans.

According to Parreira, overall production should be slightly under the estimate presented in Chicago. He reports harvest progress at between 50% and 70%, depending on the area, and expects most of it to be finished by mid-November.

“Yields are down a little bit from last year,” he says. “It’s a little drier, so they are having more cleanouts than usual. But it’s still early, so it’s hard to tell. Hardly any of this stuff has been cleaned, maybe just 20%, so it’s still too early to get a good handle on yields.”

There are good quantities of black-eye peas in stock, but the carryover situation for large lima beans is practically nil, and although there are a few baby limas in stock, Parreira reports that they have all been sold.

In terms of prices, Parreira says that black-eye pea prices remain stable from the year before, and that large and baby lima prices are up due to demand.

Washington

At the Convention, Tom Grebb of the Central Bean Company represented the Washington Bean Dealers Association, and presented a production estimate of 686,166 cwt for the state’s irrigated fields.

Harvest progress is at 95% and yields are a bit above average, reports Grebb. “Washington has had great weather,” he says, “and the quality looks really good on most production.”

Grebb’s estimates do not include production from Washington’s share of the Palouse region. For information on the harvest there, IFT turned to Phil Hinrichs, president of Hinrichs Trading Company, who reports that, despite some rain delays, the harvest concluded with yields and overall production at normal levels.

“This year was a big test for our growers due to an inconsistent time of harvest,” says Hinrichs. “But the long falls that we have here continue to make it an outstanding chickpea growing region.”

Chickpea quality was above average, with good size, color and uniformity.

“Overall expectation for this crop,” sums up Hinrichs, “is that we’ll be able to present a number one graded product to the world and continue to lead the world in terms of quality. We go into the export market with a large-size bean. The world can supply small chickpeas, but when it comes to 10 mm and 11 mm beans, our only competition is Mexico. In Mexico, they hold up their market price because supply is less than demand.”

In the U.S., Hinrichs says chickpea prices are in the US$ 0.45 to US$ 0.50 range, slightly above the all bean average. White and red beans, he observes, have gone almost to US$ 0.90.

The carryover amount was not substantial, reports Hinrichs, noting that the demand for chickpeas is high at present. “Selling is above average and shipping is moving right along. Domestic demand has grown by 25% and could grow even more. It’s early. We’ve been selling this crop for only 45 days and the domestic trade is in high demand. Exports are, in my opinion, a little slower than normal. Why that is, we are not too sure because world demand is up.”

Asked about the meteoric increase in domestic demand, Hinrichs replies, “It looks to me like this trend has a pretty good arm up. I believe it will affect exports in the future because I think we hit our acreage limit.”

Hinrichs is also seeing the demand for organic foods trending upward. “Organic chickpea demand is up 100% compared to last year. It’s a small niche market, so it doesn’t take much to double it. Can this trend continue for the next four or five years? The organic trend is up in the U.S. across all bean classes. With organic chickpeas, I see it being in tight hands, and whoever owns it will have a very expensive bean.”

View goIFT’s Video Interview Series, your infinite source for news and media!

IFT visited the Palouse growing region in July to gain market insight and early 2013 harvest predictions. Watch the full video interview with CEO Phil Hinrichs, Hinrichs Trading Company.