Beans Struggle to Compete for Land

VANCOUVER - Feb 15/08 - SNS -- North American pulse markets have entered the last half of the 2007-08 marketing campaign on an unusually bullish note, with grower and inter-dealer markets for a wide range of products continually setting new record high price levels. Competition for acreage this year has combined with excellent international demand to pull prices higher.

Processors in the United States report extremely tight supplies of durum, spring wheat and spring barley planting seed in North Dakota, and the U.S. Pacific Northwest. Getting growers to maintain pulse area is going to tougher than initially anticipated. In states where corn and soybeans are viable options, dry edible bean processors are also reporting tremendous problems maintaining grower interest.

The net result is total pulse area should be down this year in the United States, with dry edible bean area reported by the USDA's NASS is expected to drop from almost 1.6 million acres to under 1.44 million; lentils from 394,000 to 354,000 acres and field peas from by about 10,000 acres to a maximum of 868,000. Average yields will be needed to keep edible bean production in line with the market's perceived minimum requirements for 2008-09; while there is room for field pea area to fall further -- and it likely will -- and the lentil forecast already be too low.

Several problems face the pulse sector in the United States. Land sown to all classes of wheat, corn and soybeans needs to rise around 7.4 million acres for a comfortable supply situation. Last year's 17 million acres increase in feed grain seedings in the United States came at the expense of a 11.9 million acre decline in U.S. soybean area, 4.4 million fewer acres of cotton, and 900,000 fewer acres devoted to other oilseeds, edible beans, peas, lentils, and sugar beets.

The challenge facing grain and oilseed markets in 2008-09 was clearly underscored by the latest baseline forecasts developed by the USDA. Land in major grains, cotton and soybeans is expected to jump from 246.5 million acres last year to 252.6 million this year. The implication is land in dry edible beans, peas, lentils, minor oilseeds, millet and other crops will decline this year. Potential shortages would generate a price response from markets, which should pull land back into those crops in 2009 and beyond. USDA forecasts seem to contain that thought as area in major grains, cotton and soybeans is expected to pull back to 248.9 million acres in 2009. However, land competition will not ease until at least 2012.

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