Dry bean contracts nearly double recent-year prices

By Scott Kraus, Ag Weekly correspondent
Friday, February 29, 2008 5:33 PM CST

Idaho's bean industry expects competition for acreage will keep prices strong for dry edible beans. Photo by Keith Weller/USDA-ARS

TWIN FALLS, Idaho - It’s still uncertain if Idaho farmers will plant more dry edible beans this spring. But what is virtually certain is they’ll turn a nice profit, according to industry sources.

Bean contract prices are good, said Bill Bitzenburg, who grows beans near Twin Falls. He said contracts are available that guarantee at least $35 per hundredweight sack for pintos. And producers get all the excess profit if prices exceed $35 a bag, he said.

In prior years, pinto prices for Idaho farmers have run little more than $18-$22 per bag.

Still, he doesn’t expect an increase in Idaho bean acreage. That’s because prices for competing small grains and corn are also high.

“I’d be surprised if we have more beans than last year,” he said. “But I don’t think we’ll have a lot less.”

He said high bean prices are needed to entice farmers to grow them. That’s because grain has some advantages over beans.

“Grain is so much easier to grow than beans, and the (grain) contracts are so high,” Bitzenburg said.

But some corn growers might switch to beans. The cost for seed corn is rising. And growing corn takes more water and costly fertilizer than growing beans.

At any rate, public bean seed varieties have been taken about six weeks earlier than usual this year from the Idaho Foundation Seed Program, said program coordinator Kathy Stewart-Williams.

“Grain prices are high,” she said. “So the bean guys are out getting commitments earlier than usual.”

Meanwhile, a wild card for bean plantings could be North Dakota, Bitzenburg said. If the nation’s largest bean-producing state greatly boosts acreage, that could weigh on prices.

But early indications are that America’s bean acreage will decline this year, the U.S. Department of Agriculture reported on Feb. 20.

Acreage could drop 5 percent to 9 percent, according to the USDA’s Economic Research Service. And 2008 production might run at least 10 percent below the 2007 total of 25.4 million sacks.

In Idaho, the projection is that dry bean acreage will drop 16.7 percent, from 90,000 in 2007 to 75,000 this year.

“A smaller crop this fall would also make higher average dry bean prices n perhaps exceeding the 1988 record n during the 2008-2009 marketing season a much safer bet,” said the report, called the Vegetables and Melons Outlook.

The first farm survey data on dry bean planting intentions is slated for release March 30, according to the report.

In any case, prices are already boosting growers’ revenues. For instance, in the 2007-2008 marketing year, the average price for all dry beans rose 19 percent to $26.40 a sack.

Just in early February this year, dealer prices per sack are up strongly compared to a year ago, the report said.

For instance, pinto beans are at $36 - up 18 percent. navy beans are at $39.25 - up 43 percent. great northerns are at $44.50 - up 44 percent. And chickpeas are at $39.50 - up 7 percent.

The report said bean prices might have to remain high until the supply increases or until prices for other crops drop. And lower bean acreage, barring unusually strong yields, could allow foreign imports to grab more of the U.S. market.

“One question that arises is whether, over the long run, some classes of U.S. beans will be priced out of the domestic market by being forced to maintain parity with elevated field-crop prices,” the report said.

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