2012 Dry Bean Update

Posted: Jan 30, 2012

The Mexican branch of the Department of Agriculture has released its best guess on total dry bean production in Mexico in 2011 at only 13.2 CWT. Which is about 6 million CWT less than the Mexican Government had hoped would be produced in 2011. These numbers were caused by a severe drought which was the worst in over 70 years. There was a significant carry of beans from 2010 crop as well as imports from the NAFTA Countries going into harvest. This will help to mitigate some of the shortfall but there still looks to be a significant need of dry bean items going forward. 

The US Pinto Market has been the most recent recipient of Mexican business with the price of pintos moving up over ten percent in the past month due to better than normal purchases by Mexican buyers. Mexican black bean buyers have not yet entered into the market to any extent, thus keeping the black bean market in check for the moment. 

Meanwhile, the overall shortfall of dry bean production is beginning to be felt with some dry bean classes already in a short supply situation. The impact of the shortfall has not really been felt yet as dry bean growers everywhere have not been shy on selling their 2011 crop production. The Michigan Bean Commission just released reported grower sales numbers through November indicating that Michigan growers have sold in excess of 70% of their crop. This puts about the same volume of beans in the marketplace in the same period as the prior two crop years. 

After an initial flush of contracting for 2012 the crop market has been slow to respond. Most end users that traditionally wait until late winter to begin purchasing beans for the next crop year have been anxiously watching the commodity markets in hopes that commodity prices will slip making dry beans more attractive. A stronger trend in commodity prices would likely be favorable to spur additional and more nearby purchases of 2012 crop dry beans in fear of losing acres to competing commodities.