Tight Bean Supply Nearly Certain

VANCOUVER - Apr 1/08 - SNS -- Dry edible bean growers in the United States do not intend to slash seeded area by as much as feared, with the USDA's National Agricultural Statistics Service (NASS) predicting seeded area will be down 8.4% from last year at just under 1.4 million acres.

Market participants were looking for between a 10% and 15% reduction in intended dry edible bean acreage this spring, with some predicting the decline would exceed 20% as growers switch land into soybeans and other crops to take advantage of high prices for crops which are easier to grow and less risky to market.

However, a return to average yields would see total production sink 15.7% to 969,929 metric tons (MT). Good growing conditions last season lifted average yields 139 pounds over 2006 levels to 1,716 pounds per acre. Repeating last season's yields would result in another 119,000 MT of dry edible beans being produced in the United States, similar to the 2006 harvest.

Data maintained by the USDA is not consistent between the NASS and the Farm Service Agency (FSA). Detailed data from the FSA indicates last year's dry edible bean harvest in the United States was closer to 1.04 million MT than the USDA's official final crop estimate of 1.144 million; while seeded area was closer to 1.384 million acres, than the 1.526 million reported by the NASS. Assuming a similar relationship between the NASS and FSA data for the coming year, the FSA might discover 1.266 million acres of beans are planned to be sown this year for a potential 876,730 MT harvest.

It does not matter whether NASS or FSA acreage and production data is used. Supply and demand forecasts end up painting a similar disappearance picture, insofar as there is no difference between estimated ending stocks. The key difference is in the "other" usage category, which tends to be smoother with FSA acreage and derived production. From the market's perspective, both sets of numbers paint a difficult supply and demand picture for the United States, with more U.S. domestic packagers and canners considering imports to cover a portion of their needs.

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