Yes… We are alive over here at http://www.drypintobeans.com! It’s been a quiet one this season, but we are alive and kicking now bean lovers! So…Where do we go from here? It’s a good question. Dry edible bean prices did not move much this season. Prices have remain subdued for various reasons. Slow export sales to Mexico and other Latin markets have been lackluster this year causing prices to be soft. The USDA weekly report has not provided any real insight into price action. Most dealers have been off the board for several weeks…now turning into months. Overall, things have been flat in a market that has been waiting for planting season to arrive so weather related issues could drive price action. Below are graphs of North Dakota and Michigan, both with opposite weather problems.
Two of the US’s largest dry edible bean growing States: North Dakota and Michigan are experiencing averse weather conditions. Western and Central North Dakota is suffering drought-like conditions and is in bad need of moisture, and the recent flooding in Michigan’s dry edible bean growing Counties of Huron, Bay, Midland, and Isabella is causing most dealers to be off the board until damage has been assessed properly. Needless to say, this is the first sign of real volatility the US dry edible bean industry has experienced all season. Growers are bullish for the first time in awhile and with Mother Nature coming into play late into the planting season, it looks like she will dominate the market’s price action until harvest.
Aside from weather problems influencing bean price action, Mexico, which is one of the US’s main export markets for dry edible beans has not been buying this season. Why? The Mexican Peso has been on the receiving end of US dollar strength since Trump took office and threatened to pull out of NAFTA. However, in the past several months the Mexican Peso has been gaining strength, and increasing Mexico’s purchasing power to buy beans from the USA. Below is a monthly chart of USD/MXN, current price is roughly 17.81 MXN Pesos for every 1 US dollar.
That being said, Mexico’s purchasing power has been quietly increasing for the past few months. Perhaps by the time new crop dry edible beans are ready to be harvested, the Peso will be stronger and Mexico will step back into the US market to purchase.
Circling back to the original question asked: Where do we go from here, who really knows? But losing acreage to soybeans, present averse bean growing weather conditions, insurance deadlines, and a lack of offers from growers is potentially setting the stage for “the perfect storm” in certain dry edible bean varieties.
Looking above at prices for Black beans from Michigan and North Dakota, we can see a historical price average for each month going back to 2011-2012. The 2015-2016 season was the lowest prices on black beans being offered from dealers and growers, which can be viewed as bottom in prices going back eight years. This is pretty significant because dry edible bean prices do not typically spike or drop in a short matter of time unless catastrophic weather or outside markets influence price action. However, given the fact two of the largest US bean producing states are experiencing averse weather conditions and the largest importer of United States dry edible beans has continued to gain purchasing power; industry participants should wake up and smell the bean dust!
The 2017-2018 dry edible bean planting season is off to a volatile start. Should averse weather conditions continue to influence this year’s dry edible bean crop and Mexico’s Peso continue to strengthen, we could have a recipe which would create “the perfect storm” for black bean and pinto bean prices to surge. These two varieties seem to be positioned best for an upside move based on today’s market conditions; whereas other bean varieties do not have as much bullish potential from the volatility currently being experienced.
Bottom line: It’s still way too early to fully calculate the extent of the weather damage across State lines, but dry edible bean bulls have the conn right now.
Recent update dated July 5, 2017 from Michigan Bean Commission Leader Joe “The Man”‘Cramer… (Not to be confused with Mad Money’s “Jim Cramer”… Joe is better)
I asked some agronomy folks to give me a couple of comments on the dry bean crop in their respective areas this morning. Thought I’d share the feedback I received…
- Just looked at some more this morning. For the most part stands are fair to good depending on planting time. I think most of the growers I work with finished 7 to 10 days ago. We have beans we have sprayed, with cultivation starting and beans just coming through. The roots look good so far, very little root rot showing up (so far)
- In the Richville/Reese/F’muth area most of the beans are struggling due to the rains of the past few weeks, but nothing bad enough to replant. Post herbicide applications are taking place this week. Of course, there are drowned out holes, but in general I would consider the beans to be much better than most had expected. We are dealing with some root rot issues with many growers attempting to foliar feed to help them along while they generate new roots. The replants (due to seed issues) seem to look the worst, as they were replanted right before the rain started. Any beans that were well established prior to the rain seems to have taken it pretty well.
- Our crop condition is all over the board. We have had to do some replanting due to the wet soil conditions. Some are just starting to plant for the first time because it was too dry, and then too wet! I took a ride out to Caseville yesterday – there are a lot of holes in fields out that way. Post weed control application has begun. If I had to sum it up in one word, our crop is “Fair.
- Michigan Bean Commission | 516 South Main Street, Suite D, Frankenmuth, Michigan 48734 | 989.262.8550