A below average harvest in the U.S. A large crop expected out of Mexico. A bean shortage in Brazil. Joe Cramer helps us put it all into perspective.

By Dario Bard

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Joe Cramer has lived in Michigan his entire life. He grew up on a livestock farm near Big Rapids and later relocated to Frankenmuth to take a job at the Star of the West Milling Company, where he worked up until last year.

“I was introduced to the bean industry at Star of the West, where I started out in the agronomy division,” Cramer reminisces. “Within a few years, in 1989, I had the opportunity to move into the dry bean trading office. And then in 1992, that became my department, and I did that until a year ago, when, after 27 years with Star of the West, I made the most difficult decision of my life to leave them so I could join the Michigan Bean Commission.”

By the time he left Star of the West, Cramer had become passionate about Michigan’s dry bean industry, and he viewed the position at the Bean Commission as an opportunity to broaden his horizons and expand his interaction with other sectors of the industry.

Given his background, it is not surprising, that few people know as much about Michigan beans as Cramer. And, because of the international reputation of his state’s black, navy and small red beans, it follows that few people have as global a perspective on the international bean industry as he does.

Following the conclusion of the Michigan bean harvest, IFT caught up with Cramer to discuss the evolving big picture for the international bean industry, and what to expect down the line from some of the major players.

IFT: Tell me about your recent career move. What has been the hardest part about going from trading beans to leading a grower’s group?

Joe Cramer: Trading is like hunting, and, like many traders, I really enjoy the hunt. So it has been difficult to give that up; I miss it every day. But this is an opportunity to make a difference for Michigan bean growers, given all the food safety issues and the mandates that are coming down the pike. This allows me to stay engaged with the end user, and hopefully I have some experience in that part of the business that can help Michigan dry bean growers transition into a more food-safety minded industry; it’s a mindset that started at the cannery, moved down to the processor and is now getting down to the grower. I think I can help that process.

Also, at my trading desk, I didn’t have a lot of exposure to the world of research. That’s very new to me, and it’s been an intriguing part of the job; it’s been fun getting involved with it at a much closer level.

IFT: How did the Michigan Bean Commission get its start and what are its primary functions?

Joe Cramer: It’s one of the oldest bean grower associations in the country; it got its start through an act of the state legislature in 1964, and it’s been in place since 1965. The state is divvied up into eight districts, and the governor appoints a commissioner to represent each of those districts plus a representative from the shipping industry. So I answer to a nine-member commission. The Michigan Department of Agriculture has oversight of our finances because we are funded through an assessment paid by the grower: US$ 0.11 per cwt sold in the state. Of that, US$ 0.02 goes to research and US$ 0.09 goes to promotion.

In terms of promotion, our goal is to participate in activities that can increase the consumption of Michigan dry beans. One of the recent activities we are proud of is the event we hosted for bean buyers and quality assurance people from around the world and across the U.S. at the last U.S. Dry Bean Convention held in Chicago last September. Over the course of three days, we took them on a tour of the growing area, visited five processing facilities and wrapped up with dinner at a research farm. The participation was great and we know that some business was done during the event. It was a great opportunity to show off Michigan’s infrastructure, to showcase some of the better bean growers and processing facilities in the country, and highlight the research component that backs up that industry.

Another promotion activity is our long-standing partnership with the Michigan bean shippers and the annual breakfast we host in Mexico City. That brings together Mexican buyers and Michigan industry participants, from growers to dealers to processors. It’s a great chance to talk about last year and this year, and learn about Mexico’s production from the Mexican participants, and then bring that information back and share it with Michigan growers, and better understand how that impacts a wide range of decisions they have to make, from marketing to their current crop to the crop they plan to plant next spring. It’s an event that provides value and that the Commission has been supporting for many years now.

On research, one of the more interesting areas we are spending time on is a color-retention study that focuses essentially on black beans. We’ve heard loudly from many canneries across the U.S. and some from abroad that expressed disappointment because the beans looked great going in the cans, but they lost some of their color when the cans were opened. The canners tell us that years ago, when beans were first being canned, they held their color better, but now they don’t and so they aren’t selling as well. Now, we don’t know if it’s a water, variety or a chemistry issue that is causing beans to lose their color. So we embarked on a study. We hope to begin to see results after January 1, and so begin to identify some of the reasons why this might be happening and what the possible solutions might be. The consumer wants to see a shiny, wet-looking bean out of the can, and if it comes out brown or purple or not glossy black, there’s disappointment. We have scientists at Michigan State helping us fix this problem.

IFT: What are some of the Commission’s important milestones?

Joe Cramer: In 1986, the Commission went to Washington, D.C. and was active, together with the shippers, on developing disaster relief for Michigan growers who suffered from flooding. Also in the ’80s, the Commission had a small role in the contracts signed with the Mexican government, and that really launched Michigan into the colored bean business in a big way.

More recently, Michigan had a big hand in funding the Pulse Health Initiative that will provide US$ 25 million per year for five years for pulse-related nutrition research. If we get a farm bill signed in the next few months, that may prove to be one of the biggest milestones in the Commission’s history. The Commission worked with the office of Senator Debbie Stabenow (MI-D) and with Michigan shippers and a gentleman by the name of Jim Byrum to facilitate the initiative. I think it’s going to be a game changer for our industry.

And of course there’s the research. It was the research segment of the Michigan Bean Commission that developed the varieties that helped black, navy and small red beans to really flourish in the state. The industry told us that one thing they needed to stay in business was to have beans that stood upright like a soybean, so that farmers could, with minor adjustments, take the same equipment used for corn, wheat and soybean into a field of black or navy beans. The Bean Commission worked with Michigan State University to create that type of variety, and today the best yielding varieties are upright in structure and farmers enjoy growing them because they don’t have to go out and pull them at 4 a.m., and they don’t have to windrow. They just direct harvest with their combines, and now they can even harvest in poor and wet conditions under which they couldn’t before, and the quality of the bean that is produced is so much better than it used to be. And now of course that upright structure is something you see across the country.

IFT: Do you think there is a chance for Michigan to grow new bean classes?

Joe Cramer: We’ve got pinto and great northern varieties in our test plots that we are excited about. They have the upright plant structure and good yield potential. Michigan hasn’t been a player in the great northern market, and we don’t expect we’ll be taking it over, but we do have end users that are looking for alternatives in that market. And we think it’s good to be able to offer our growers some diversity.

IFT: Michigan production this year was reported at 3.4 million cwt. How would you characterize this last harvest?

Joe Cramer: Our yields were slightly above average. If you compare it to yields of a decade ago, we got above average yields this year. But frankly, it’s the kind of yields our growers have come to expect. Historically, our yields are probably around 18 bags per acre, but when farmers include dry beans in their rotations nowadays, they assume they are going to get 20 bags. And I think that the varieties we have, with a bit of help from Mother Nature, are very capable of that.

In terms of acres, we were down a bit this year due to corn and soybean prices (editor’s note: 175,000 bean acres were planted according to the USDA’s December 10 Crop Production Report). This next campaign, we are looking to bounce back to 200,000 acres or more.

IFT: What are the major markets for Michigan dry beans?

Joe Cramer: Most of our production goes to U.S. canners and packagers, and about a third is exported. This year, we’ve seen some non-traditional demand, especially for navy beans, which have become an alternative for large white beans as the global supply there has deteriorated.

We have a great relationship with domestic canners, and we truly appreciate them, but having said that, Mexico is a huge market for us, especially for black beans, and it has been for many years. In terms of volume, Mexico is our biggest trading partner. We also put beans into the United Kingdom and the Mediterranean. We’d like to grow that business. Over the years, we lost some tonnage to China and other origination points, but hopefully we can gain some of that back. What happened there is that a few years ago, China was very aggressive with pricing, and some of our customers, particularly in the Mediterranean, were attracted to those bargains, so we lost some volume. But in recent years, we’ve re-established contacts and business is picking up there again.

IFT: Michigan was selected for a pilot insurance program by the USDA Risk Management Agency. How is that going?

Joe Cramer: Our friends in North Dakota and Minnesota began the work on that two years ago. Last year, they ran a pilot operation that worked well. They were receptive to the idea of allowing us to expand that in Michigan. So we worked with Montana-based Watts & Associates, and we had good collaboration from Michigan shippers who supplied the data to them. Watts & Associates developed a program off that data, and it’s being rolled out as we speak. We don’t think it will significantly impact our acreage, but we do hope it will give growers some of the same assurances and security that they’ve enjoyed with corn and soybeans, but have not had with dry beans. So it begins to level the field between those rotational choices, and we think that is very good for our industry.

IFT: The EPA recently proposed a rule to ease ethanol requirements. What might that mean for the US bean industry?

Joe Cramer: I think you’ll see corn and soybean acreage change because of the market impact, and that would open the door for dry bean growers again. I said earlier that we are looking to bounce back acreage-wise next campaign, and I think that’s where the acreage will come from.

IFT: U.S. dry bean production seems to fluctuate a lot based mainly on soybean and corn prices. Is that likely to continue?

Joe Cramer: There is a definite relationship there. If you take corn and soybean acreage and pricing and overlay dry bean acreage and pricing on that, you’ll see they sort of run in tandem. If you happen to be in a big dry bean year, the market seems to adjust pricing to impact acreage to affect supply so that a two or three year supply of dry beans doesn’t build up. Years ago, we got that build up. There wasn’t the discipline in the market we are seeing now. Today, industry players, independent of each other, are studying the corn and soybean situation and really trying to understand the global supply-demand scenario for dry beans. So the market is being developed around the acreage that is needed, more so than the acreage that is wanted. Last year, for example, it was too late for Michigan growers to respond significantly to issues in Argentina. Had that happened a couple of months earlier, the price would have reacted to Argentina and the market would have been asking for more acreage at the last minute; growers would have responded and those acres would have been planted. Except that, in this case, the timing was off by about 30 days.

IFT: The news out of Mexico is that there is a large bean crop coming this year, and that has led to pricing concerns here in the U.S. How do you see that situation?

Joe Cramer: At the Commission, we understand that the crop in Mexico is bigger than what most people originally expected, but we haven’t seen good, conclusive data on it, so that chapter still has to be written. Having said that, we believe there is a segment of Mexico City consumers who, regardless of the size of the national crop, will still buy Michigan black beans. For this segment, it’s about quality and they have become accustomed to eating Michigan beans. That speaks to the exceptional bean put out by our growers and processors. Now, that’s just a segment of the whole market, and it is a price sensitive consumer, but thanks to them, we can expect to move a couple of million bags a year regardless of the supply-demand equation. Even if the market is saturated with national production and prices are depressed, we can count on this market segment and expect that Michigan production will still be able to command a slight premium. That’s not to say we take this for granted. We appreciate our clients there and we work hard to maintain them, but the statistics suggest that regardless of global supply-demand, there will be buyers for that higher quality bean. That’s something we are pretty proud of, and it is a relationship we very much value. The thing, though, is that price becomes a moving target.

Also, you have to consider the global picture, with Argentina’s issues and the situations in Brazil, Cuba, Venezuela and China; put all those pieces together, and you’ll see that we are not by any means drowning in black beans. So Mexico’s influence on the market may not be as significant as it has been historically. The jury is still out on that. In other words, what I’m saying is that if there was a good year for Mexico to have a big crop, this was probably it, because we need a big crop globally.

IFT: A Brazilian trade delegation visited U.S. bean growing areas a few months ago. Do you see the potential to establish a long-term trading relationship there?

Joe Cramer: We hope they’ll become long-term trading partners. It’s a market we’ve known for years and we have some relationships there, but frankly the logistics out of Argentina frequently trump us. But when Argentina stubs its toe, we get a few phone calls from Brazil. We’d love to cultivate those relationships and develop them into what we have in Mexico, but so much hinges on what happens in Argentina that I don’t know if we can ever have that level of success down there. I appreciate the opportunity to meet with them and I hope Michigan processors can put some deals together. Those deals, incidentally, would come easier if we were in fact drowning in beans here in the U.S., but Michigan’s 3.4 million bags of beans, of all classes, isn’t burdensome. We didn’t have a big carryover, so our guys won’t likely be as aggressive price-wise as I am sure the Brazilians would like us to be. Hopefully, we’ll get a few tons in there and introduce our friends in Brazil to Michigan beans again.

IFT: What other markets offer the most potential for the U.S. dry bean industry?

Joe Cramer: Right now, we’ve got a delegation in Turkey through the U.S. Dry Bean Council, and I always wonder where Michigan can fit in, whether with a larger white bean like a great northern or a large navy. That Middle Eastern market segment is interesting to me.

Long term, I think the U.S. industry and Michigan in particular need to have their eyes on India, which is very new to us. Also, there are opportunities in Europe that we haven’t fully developed yet. Europe is on our radar for this coming year.

IFT: What message do you have for IFT readers?

Joe Cramer: We have a great product with a great health story to tell, and I think IFT can help us tell that story. As consumers become more and more health conscious, it’s going to be great to be in the bean industry. And as the global population grows, I think pulses are going to feed the world. We need to be ready for that.