Dry Bean Outlook

Dry Bean Smallest Harvested Area Since 1921

U.S. dry bean markets find themselves moving up into relatively unfamiliar territory as prices continue to reach for the sky in reaction to a small 2011 crop, strong prices for other field crops, and moderate demand. The October U.S. dry bean production estimate was trimmed to 19.6 million hundredweight (cwt)—down 38 percent from a year earlier and the smallest crop since 2004’s weather-shortened crop. Although yield is projected to be up 1 percent to 17.44 bags, harvested area for the 2011 dry bean crop is currently expected to be 1.12 million acres—the lowest since 1921. Harvested area is expected to be lower than a year earlier for each of the 18 States included in the estimate, with industry leader, North Dakota, down 52 percent. The first production estimate of dry beans by class will be released by USDA on December 9.

The 2011/12 dry bean season opened in September with a preliminary estimate of $40.90 per cwt for the industry aggregate grower price—54 percent above a year earlier but less than the record high nominal (unadjusted for inflation) price of $47.20 per cwt received in March 1974. This September’s price was easily supported by grower bids exceeding $40 for most bean classes. Grower prices continued to move higher into October (with some classes giving indications of stabilizing along with field-crop markets) with very limited open-market sales movement. These limited supplies and strong prices will likely attract imported product throughout the season. As a result, dry bean import volume is expected to see double digit increases in 2011, while export volume likely falls below 8 million cwt for the first time since 2006/07. Prices Up But Stiff Competition For Area Likely in 2012 Although dry bean stocks entering the 2011/12 season were the highest in a decade, total available supplies will likely be among the lowest of the past 2 decades. In combination with moderate world demand, the weak U.S. dollar, and smaller crops in some competing and consuming nations (including Canada and Mexico), it is not surprising that nominal dollar prices are reaching record highs this fall. After adjusting for the impact of inflation, this year’s season average dry bean grower price is expected to be the highest since 1989.

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