Dry Bean Crop Shortfall Forecast in Several Competitor and Target Markets

June 13, 2016
Posted in: News

The last year has been very challenging for agriculture in general as a result of the El Nino weather phenomenon. While U.S. dry bean planting is taking place stateside, our on the ground global market intelligence is forecasting dry bean shortfalls in some important markets.

China

According to Fairman International Business consulting, it is anticipated that Chinese bean farmers will plant less than half of the total dry bean acreage planted in 2014 and total production will be less than 250,000 tons. According to Fairman, “this represents a very sudden and significant contraction primarily caused by decreasing worldwide bean prices over the last two years.” Total production for 2016 is forecast at less than 250,000 tons. This is down from approximately $350,000 tons. Carryover is diminished as well.

Source: Fairman International Business Consulting

Source: Fairman International Business Consulting

Mexico

SAGARPA, Mexico’s Agricultural Secretariat is forecasting that final dry bean inventories at the end of September 2016 will be around 91,000 MT, 76% lower than in 2015. SAGARPA is also estimating that the national bean consumption for the 2015-2016 agricultural year will be 1.1 million MT or 9 kilos per capita. The breakdown by variety consumed is: 44% black beans and 25% pinto beans representing 70% of the total bean consumption.

Argentina

Argentina has been hit by bad weather including too much rain and early frost.  Our market representative is predicting reduced yields of up to 25-30%. An inside trade source has told us that expected yields are 800-900 kg/Ha. The ten year average by comparison, is about 1.2 mt/Ha. We have also heard reports that frost damaged 50,000 hectares of black and color beans which may reduce yield by as much as 50% in some areas.  Argentina has experienced some sort of crop problem for three of the last four years.

Source: USDBC Mercosur

Source: USDBC Mercosur

Brazil

Brazil’s first dry bean crop had too much rain at harvest.  The second crop was planted late and hit by drought.  Brazilian traders believe that Brazil will be short on dry beans from July to December.  Traditionally Brazil has looked to Argentina to fill supply shortfalls, but with Argentina’s crop shortfall this year, the market outlook may be different.
It is difficult to predict what the difficult weather conditions and resulting production and yield shortfalls will mean for U.S. dry bean exports but it’s safe to say that there will likely be some new export opportunities this year. We are continuing to assess the specifics and will keep the industry informed as the situation continues to evolve.