Dry Bean Prices Firm Up
Happy 2016 everyone! We’re back in the saddle again after a nice long break with the holidays and new year. Dry bean prices have been soft lately and do seem to have touched the bottom in terms of price by taking a look at dealer prices this week. This week was the first time bean varieties have moved upward since the start of 2016. The big winners were pinto beans and lentils in terms of price action. Pinto dealers out of the rocky mountain region decide enough was enough and bumped up the bid by $2, and the ask by about a buck.
Mindak pinto dealers also nudged up $0.50 per CWT while Pacific dealers felt good about raising bid/ask for a $1. Lentils on the other hand saw continued strength from growers jumping up by $4-$6 per CWT on brewers and pardina varieties. The reason for the jump in lentils is simple, demand has skyrocketed and grower prices continue to set new records. Export markets to India, Turkey and Middle East have increased their consumption rate by almost one quarter the past 8 years. Many of you already know 2016 has been declared International Year of Pulses (IYOP). The United Nations declaration is to bring awareness to the world about the nutritional benefits of consuming pulses. In comparison with animal protein, pulse-based protein is much cheaper.
Navy beans also saw a nice $2 surge north bound as dealer bids averaged about $31 per CWT. Chickpeas on the other hand saw dealer bids drop by $3 to $39 per CWT versus being at $42 the previous week.
So where do bean and pulse prices go from here? No one knows yet. The Mexico dry bean crop has some uncertainty due to frost and quality concerns. If harvest yields are less than expected in January then there is a good chance Mexico will have to import any shortages they may experience. This would provide support to pinto and black bean growers and give them the chance to continue rebounding in price.
Speaking of black beans…prices haven’t been this low since dinosaurs roamed the earth millions of years ago. Some of you were probably alive back then and can remember (or maybe not by now), but due to the amount of blacks this year in the market prices have fallen well below grower comfort zones. Thus causing talk about an acreage reduction of anywhere between 15%-25% in certain growing areas of the US going into next year. If that does come to fruition then market participants might be sorry by not taking a second mortgage and buying more black beans today.
Bottom line: Might be a good time to start considering building a portfolio in certain varieties for next year.