SECOND LARGEST U.S. DRY BEAN CROP FORCES PRICE ESTIMATES LOWER

Editor: Marlene Fritz (208/364-4010 in Boise)
Source: Paul Patterson (208/529-8376 in Idaho Falls)

IDAHO FALLS, Idaho–Higher-than-anticipated yields pushed the December estimate for 1999 U.S. dry edible bean production to 33.08 million hundredweight, making it the second largest crop on record. Exceeded only by 1991’s 33.77 million cwt. crop, the 1999 harvest edged up 4.2 percent over October estimates and 8.8 percent over 1998.

"The larger-than-expected crop has put added pressure on already depressed bean prices," says Paul Patterson, University of Idaho extension agricultural economist. The 1998 crop was the fifth largest on record and had already "pushed bean supplies to burdensome levels."

Patterson has lowered his projection of the average composite dry bean price for the 1999-00 marketing year to $17.25. This is 20 cents above the average composite price for 1998-99, but it is well below the five-year average of $20.30.

Even though 1999 U.S. Pinto production is 24 percent below 1998, Pinto prices have trended lower since September and are trading at $16 as the calendar year ends–similar to year-ago figures. Great Northerns have moved lower as well–to $17 in late December–and Pinks have slipped even more steeply, to $14-16. Small Reds are trading at $14-15, down from $17 early in the current marketing year, and Small Whites are level at $18-20.

"While the overall price weakness is somewhat of a surprise compared with earlier estimates, it can certainly be explained by the upward revision in USDA’s production estimate," writes Patterson in the University of Idaho’s January 2000 Idaho Agricultural Outlook. "I would expect to see some price improvement in 2000, but it’s difficult to have much optimism when production is above the five-year average and exports below the five-year average."

Patterson calls exports the "key to better prices." USDA’s current export estimate for calendar year 1999 is only 7.8 million cwt., a 27 percent reduction from 1998. "The only good news is that 1998 was the best export year since 1990, so that--although the percentage drop is significant--it is not as bad as it appears," says Patterson. With U.S. population at about 272 million and per capita annual bean consumption at 7.8 pounds, domestic use of dry beans adds up to around 21.2 million cwt.–or roughly two-thirds of the 1999 crop.

For the marketing year 2000-01, estimating exports at their five-year average 8.7 million cwt. and U.S. production at between 29.5 and 32.9 million cwt., Patterson forecasts the average Idaho price at $17.75, give or take a dollar. Idaho production should range between 1.9 million cwt. and 2.3 million cwt. in 2000.

"Even under my low-production scenario, I don’t see prices moving much above $18.75," he says. "With two large back-to-back crops, it would take an unexpectedly large drop in production or an unexpectedly large increase in exports to move prices significantly."

Idaho dry bean growers harvested an estimated 20.5 cwt. per acre on 103,000 acres in 1999, identical to 1998. Oregon’s production is down 14.5 percent and Washington’s is off 15.7 percent.

The University of Idaho’s January 2000 Idaho Agricultural Outlook is available at length, with supporting tables and graphs, on the web site of the UI Department of Agricultural Economics and Rural Sociology, http://www.uidaho.edu/ag/agecon. Once on the home page, Internet users should click first on Publications, then on the Idaho Agricultural Outlook for January 2000. Planning price projections for Idaho commodities can also be found on the home page.