2004-12-17 | Volume 17 Number 18 | ISSN 1494-1805 | AAFC No. 2081/E

Dry Beans: Situation and Outlook

Canadian dry bean production has increased significantly during the past ten years and is expected to increase further during the next ten years, as Canadian crop production continues to diversify. Although Canada produces only a small percentage of the world's dry beans, it became the third largest exporter of dry beans in the world in 2003-2004, accounting for nearly 10% of world exports. The value of Canadian exports reached $227 million in 2003-2004. However, exports are forecast to decrease sharply in 2004-2005 due to sharply lower production caused by unfavourable weather in Manitoba, the main producing province. Prices increased for nearly all classes of dry beans. This issue of the Bi-weekly Bulletin examines the situation for 2004-2005 and the outlook for dry beans.

Background

At the world level, the term dry beans refers to several categories of beans. Dry beans produced in North and South America, Europe and Africa belong mainly to the genus Phaseolus, which is of American origin. Most of the beans in the genus Phaseolus belong to the species vulgaris, widely known as common beans. This species includes the classes of beans produced in Canada, such as white pea, pinto, black, dark and light red kidney, cranberry, small red, Great Northern, pink, brown and white kidney. The other significant species under the genus Phaseolus is lunatus, which includes lima beans. In Asia and Australia, most dry beans produced belong to the genus Vigna, which is of Asian origin. Common members of Vigna include azuki beans (Vigna angularis) and mung beans (Vigna radiata). In addition, in some countries other crops are included under dry beans. For example, garbanzo beans are included under dry beans in the United States (US). Garbanzo beans are actually kabuli chickpeas and are included with chickpeas in Canada and other producing countries.

Dry beans are a leguminous crop and are able to fix their own nitrogen. Therefore inoculation is recommended. However, they do not fix as much nitrogen as dry peas, lentils, and fababeans. Dry beans are very sensitive to frost; therefore seeding should be done when the risk of a killing spring frost is over and soil temperature is greater than 10 degrees Celsius. They require 90-110 frost free days, depending on class and variety. Dry beans adapt to a wide range of soils, but do best in medium textured soils such as light loams, sandy loams and silt loams that offer good water infiltration and good water holding capacity, combined with good internal drainage. Dry beans fit well in crop rotations with crops such as cereal grains and corn.

World

Production

World dry bean production has been variable during the past ten years, but had a slight upward trend. Production, during this period, ranged from a low of 15.7 million tonnes (Mt) in 1994-1995 to a high of 18.9 Mt in 2002-2003.

Dry beans of the genus Phaseolus are produced mainly in North and South America, with Brazil, United States (US), Mexico, Canada and Argentina being the main producing countries. During the past 10 years, dry bean production in the US, Brazil, Argentina and Mexico has been variable, with no noticeable trend.

US production (excluding garbanzos) during the past ten years ranged from a low of 0.796 Mt in 2004-2005 to a high of 1.47 Mt in 1999-2000. The top seven producing states for 2004-2005, in order of importance, are North Dakota, Michigan, Nebraska, Idaho, Colorado, California and Minnesota. The top three classes of dry beans produced in the USare pinto, white pea (navy) and black. Other classes produced include Great Northern, dark and light red kidney, blackeye, small red, pink, cranberry, baby limas, large limas, and small white.

Although China is a relatively small producer of genus Phaseolus dry beans, such as black, most of its production of this category of beans is exported.

Trade

World trade in dry beans has been trending upwards during the past ten years. In 2003, the latest year for which data is available, exports were 2.8 Mt. The top five exporting countries in 2003, China, Myanmar, US, Canada and Argentina accounted for 76% of world exports. Imports are distributed much more widely than exports, with the top twenty importing countries accounting for only 67% of world imports in 2003.

In North and South America, Brazil and Mexico are significant net importers of dry beans. Although most of USproduction is consumed domestically, it had been the largest exporter of dry beans in North and South America, until Canada surpassed it in 2003-2004. About a quarter of USproduction is exported, mainly to Latin America and Europe. Most of Canadian and Argentine dry bean production is exported.

Canada

Production

Canadian dry bean production has been trending upwards during the past ten years with most of the growth occurring in Manitoba. White pea beans remain the largest class of beans produced, but most of the growth has been for other classes, commonly referred to as coloured beans, especially pinto. Other classes of dry beans produced in Canada are cranberry, black, Great Northern, dark red kidney, light red kidney, small red and pink. In addition, a small amount of white kidney, brown, azuki, otebo and kintoki, and even smaller amounts of yellow eye, soldier, and Jacob's cattle beans are produced. The Canadian dry bean harvest normally starts in late August and ends by mid-October.

Marketing

Most of the dry beans in Canada are marketed on the open market; however there are several voluntary pooling arrangements. The Government of Canada guarantees the initial payments and marketing costs for two pooling agreements under the Price Pooling Program of the Agricultural Marketing Programs Act (AMPA).

The remainder of the dry beans produced in Canada are sold on the open market to dealers. Some dry beans are grown under production contracts which guarantee a price for part of the production. The amount grown under

production contracts varies from year to year depending on the level of prices offered under the contracts. The remainder of the dry beans are sold at spot prices.

Prices

Canadian dry bean prices are determined on an export basis because Canada exports roughly 80% of its production. Canadian prices generally follow USprices for the same class of beans adjusted by the exchange rate and transportation cost. Substitution of one class of beans with another is limited in the market place; therefore it is common for wide price spreads to exist between different classes of beans. Supply and demand factors affect the prices for each class of beans independently.

World supply and demand by class is not available, but total Canadian and USsupply has the largest impact on Canadian dry bean prices. Very high Canadian prices occurred in years when the total Canadian and USseeded area decreased and there were production problems in at least one major producing region in Canada or the US. Prices normally relate to total Canadian and USsupply conditions unless there are international influences, such as unusually high demand from importing countries or unusually high competition from other exporting countries. Among countries other than the USand Canada, production levels in Brazil, Argentina, Mexico and China also have significant impact on Canadian prices.

Since there is no formal futures market for dry beans, prices are negotiated directly between dealers and customers and are based on supply and demand factors for each class of beans. The prices negotiated could be for nearby or future delivery.

Domestic Use

Canadian domestic use, which includes food, feed, seed, dockage and waste, accounts for only about 20% of production. It has been trending upwards with increased production and increased use for food. Food use has been growing because of increased knowledge that dry beans are a healthy food, increased use of dry beans in ethnic cuisine, and the development of quick-cooking and specialty products.

Exports and Imports

Canadian exports have been trending upwards in line with the increase in production. Although exports increased to all regions of the world, the largest increase was to Europe and the US. The main importing countries are the US, mainly coloured beans, and the United Kingdom (UK), mainly white pea beans. Other major importing countries are Italy, Angola, Cuba, Dominican Republic and Japan. All exports are carried out by bean dealers. With about 80% of Canadian dry bean production moving to other countries, Canadian producers and dealers are far more dependent on exports than their counterparts in most other countries.

Canadian imports of dry beans are mostly from the US. There is a brisk trade in dry beans in both directions across the Canada-US border. Since many USand Canadian dealers are located near the border, many producers in both countries deliver beans across the border if there is a price advantage. In addition, dry beans are exported to processing plants in both countries and some of the imported beans are re-exported to other countries.

Organizations

The Canadian Grain Commission (CGC) administers quality standards for dry beans. For information, or to access the Official Grain Grading Guide, please visit the CGC website: (www.grainscanada.gc.ca). Lower grade beans can usually be upgraded to No. 1 Canada through processing, which includes cleaning and colour sorting.

The Canadian Special Crops Association (CSCA) (www.specialcrops.mb.ca) establishes trade rules for domestic trade and serves as a forum for exporters, dealers and brokers involved in the industry of trading Canada's pulse and special crops, including dry beans. The website includes a section where buyers can submit a request for prices.

Pulse Canada (www.pulsecanada.com) is an industry organization, with the CSCA and provincial pulse growers' organizations as members. It is involved in market development and market access activities, coordination of scientific research and development, and policy issues. The website contains information on pulse crops, markets, and health and nutrition.

Utilization

Dry beans are used almost entirely for human food. They are either canned, packaged dry for retail sale or further processed into products such as refried beans, pork and beans, stews, soups, chili, bean flour, bean paste, fibre biscuits, and snack food. Only a small amount of low grade, weather-damaged beans are used for livestock feed.

About 85% of dry beans are consumed in the countries where they are produced. India, Brazil, Mexico, US, and China are the world's largest consumers of dry beans. However, China and India consume mainly genus Vigna beans, especially mung beans. On a regional basis, per capita consumption is the highest in Latin America at about 15 kilograms (kg) per annum, and is predominantly of coloured beans such as pinto, black, red kidney, and cranberry.

Healthy Diet

Pulses, including dry beans, are increasingly being used in health-conscious diets to promote general well-being and reduce the risk of illness. They are low in sodium and fat, high in protein, and are an excellent source of both soluble and insoluble fibre, complex carbohydrates, vitamins (especially B vitamins) and minerals (especially potassium, phosphorus, calcium, magnesium, copper, iron and zinc). Dry beans are an inexpensive, high quality source of protein.

Since dry beans are high in fibre, low in sodium and fat, and are cholesterol free, they are an excellent heart healthy food that may be beneficial to the prevention of coronary and cardiovascular disease.

Eating dry beans may help lower blood cholesterol levels due to their high content of soluble fibre and vegetable protein.

Dry bean consumption can be beneficial in the management of type-2 diabetes because they have a low glycemic index of 55 or less, indicating that their effect on blood glucose is less than that of many other carbohydrate containing foods. Dry beans also have other health effects, such as reducing blood lipids, that may help some serious complications of diabetes.

Flour made from dry beans is gluten free and is a very nutritious option for people with celiac disease.

Dry beans fit well in vegetarian diets as they are a good source of iron and protein, and complement the amino acid profile of cereal grains and nuts.

Insoluble dietary fibre consumption can be beneficial to a healthy colon and has been associated with reducing the risk of colon cancer. In addition, diets high in fibre have demonstrated beneficial effects on weight loss because they deliver more bulk and less energy.

Dry beans are an excellent source of the B vitamin folate which is an essential nutrient. In addition, folate consumption during pregnancy has been shown to reduce the risk of neural tube defects.

Outlook

World: 2004-2005

World production is expected to decrease by 7%, from 2003-2004, to 17.3 Mt.

Canada and US: 2004-2005

Canadian dry bean seeded area decreased by 2% to 163,000 hectares (ha). White pea bean area decreased by 5% to 65,000 ha and coloured bean area decreased by 1% to 98,000 ha.

Canadian dry bean production decreased by 38% to 220,000 tonnes (t), the lowest level since 1998, due mainly to unfavourable growing conditions in Manitoba. Seeding in that province was late because of wet and cold weather, and the wet and cool weather continued during most of the growing period, which delayed crop development. Frost occurred in the dry bean growing areas as early as late August. The wet weather continued during the harvest period, which further reduced yields and quality, and increased crop abandonment. As a result, Manitoba produced only 17% of Canada's dry beans although it accounted for 50% of Canada's seeded area. Canadian production decreased for nearly all classes of dry beans.

Canadian supply of dry beans decreased by 38% to 285,000 t and total use is expected to decrease sharply due to the low supply. Carry-out stocks are expected to decrease to a low level.

US production decreased by 20% to 796,000 t (excluding garbanzos). Production decreased for the major classes of dry beans, with the exception of black for which production increased, and small red and cranberry for which production was stable. USseeded area decreased only slightly, but unfavourable weather in North Dakota and Minnesota reduced yields and increased abandonment. These states had the same problems as Manitoba, but the degree of damage was not as severe. Supply decreased by 15% to 1.07 Mt, as slightly higher carry-in stocks offset some of the decrease in production. The top three bean classes, pinto, white pea (navy) and black, accounted for 46%, 12% and 11% of USdry bean production, respectively, in 2004-2005.

In the US, dry beans are not included under the loan program of the USFarm Security and Rural Investment Act of 2002, nor were they included under the previous program.

Total Canadian and US supply decreased by 22% to 1.32 Mt. Total use and carry-out stocks are expected to decrease, due to the lower supply. Total Canadian and USsupply decreased for the major classes of dry beans, with the exception of black.

The lower total USand Canadian supply is expected to, in general, support Canadian prices, but some of the support is expected to be offset by the stronger Canadian dollar. Average prices are expected to increase for the major classes of dry beans, with the exception of Great Northern. Although the total USand Canadian supply increased for black beans, this is expected to be offset by higher demand, due to reduced competition from China and Argentina.

Canada and US: 2005-2006

Early indications are that the seeded area for dry beans will increase in both countries, as prices are very attractive for most classes of beans. However, the increase in seeded area could be limited by the seed supply and by possible discouragement of producers in North Dakota, Minnesota and especially in Manitoba, because of the poor crop in 2004-2005. Other factors which are expected to affect the seeded area are the level of prices offered in production contracts and the US/Canada exchange rate.

Canada: Long-Term

Canadian dry bean production is expected to increase over the decade, with the bulk of the growth occurring in western Canada, especially in Saskatchewan and Manitoba. The Saskatchewan dry bean industry is still in the development stage, but work is underway to develop shorter season pinto, black, white pea, Great Northern, small red and other bean varieties. Commercial production of some shorter season varieties has started and Saskatchewan is expected to become an important dry bean producer. Production in Manitoba is also expected to grow and will likely expand into new areas with the development of shorter season varieties. The potential growth in Alberta dry bean seeded area is limited because beans use mainly irrigated land and face competition from crops, such as potatoes and sugar beets, which have higher net returns per hectare. Outside the irrigated area, Alberta is generally either too dry or has too short a growing season for dry bean production, but there could be some growth in new areas with the development of shorter season varieties.

Mexico, one of the largest importers of dry beans in the world, has the potential of becoming an important market for Canada. Under the North American Free Trade Agreement, a 15 year transition period, ending in 2008, was established for the import of dry beans from the US and Canada. For 2005, Canada has a tariff rate quota (TRQ) of 2,076 t and an over TRQ tariff of 35.2%. Although imports within the TRQ are tariff-free, the importers have to pay for the right to import at a level established through an auction system. Dry beans imported for seeding already have a zero tariff rate. Canadian dry bean exports to Mexico are expected to trend upwards during the next decade as the tariff rate is lowered and then eliminated. The over TRQ tariff rate is scheduled to decrease to 23.5% in 2006 and 11.8% in 2007, and be eliminated in 2008. One concern is that the government of Mexico will be pressured by producers to apply non-tariff barriers to limit imports once the tariffs are eliminated. The Mexican demand is mainly for coloured beans, especially pinto and black.

Classes of Dry Beans Produced in Canada

White Pea (also known as navy and alubias chica)

- produced in Manitoba and Ontario
- small white oval beans used mainly for canning and dry packaging
- seeds/100 grams (g): 450-525
- mainly canned in tomato sauce; also used in soups, stews, pork and beans, baked bean dishes, salads and purees
- main export destinations are: UK, other EU, US

Pinto

- produced mainly in Manitoba, Saskatchewan and Alberta
- medium oval beans, with white to beige background and brown mottled flecks
- seeds/100 g: 260-300
- used for refried beans and dry packaging, a favourite for Mexican and South American dishes; beans turn solid pink when cooked
- main export destinations are: Central America and Caribbean, South America, Angola

Black (black turtle, preto)

- medium black oval beans produced mainly in Manitoba and Ontario
- seeds/100 g: 500-550
- used for canning and dry packaging
- popular in Caribbean, Mexican and South American cuisine, traditional in soups, black beans and rice, stews and sauces; adds colour to salads
- main export destinations are: Central America and Caribbean, South America, US

Light Red Kidney

- produced mainly in Ontario and Manitoba
- kidney shaped, brownish red in colour
- seeds/100 g: 170-220
- used for canning and dry packaging
- used in salads, casseroles, red beans and rice, chili and Mexican cuisine
- main export destinations are: EU, the Middle East, Central America and Caribbean, South America

Dark Red Kidney

- produced mainly in Ontario and Manitoba
- kidney shaped, dark red in colour
- seeds/100 g: 150-200
- used for canning and dry packaging
- favoured bean for making New Orleans red bean dish, soups, casseroles and chili
- main export destinations are: EU, US

Small Red (red Mexican)

- produced mainly in Alberta and Manitoba
- dark red beans
- seeds/100 gm: 275-330
- used for canning and dry packaging
- adds sparkle to bean salads; can be used in any coloured bean recipe including soups, salads, chili and Creole dishes
- main export destinations are: Central America and Caribbean, South America, US

Azuki

- small red bean
- produced in Ontario
- sweet red bean paste
- exported to Japan

Great Northern (large white)

- produced mainly in Alberta and Manitoba
- medium white oval beans
- seeds/100 g: 280-330
- a frequent choice for soups, stews, casseroles, baked dishes and mixing with other varieties
- used for dry packaging
- main export destinations are: Northern Africa, the Middle East, EU

Pink

- produced mainly in Alberta and Manitoba
- pinkish beige beans
- seeds/100 g: 330-400
- used for refried beans and dry packaging
- popular in barbecue style dishes, chili, soups, salads and casseroles
- main export destinations are: Central America and Caribbean, South America, US

Brown (dutch brown)

- produced in Ontario and Manitoba
- tan in colour, with a white hilum
- seeds/100 g: 210-300
- used for canning and dry packaging
- main export destination is: Netherlands

White Kidney (Cannellini, alubia type)

- flat white bean
- produced in Ontario
- seeds/100 g: 150-200
- used for canning and dry packaging
- make a perfect low fat base for dips and spreads
- main export destination is: EU

Cranberry (romano, speckled sugar)

- produced in Ontario, Quebec and Manitoba
- burgundy mottled beans with a white to buff seed coat
- seeds/100 g: 145-225
- used for dry packaging & canning; in soups, stews, chili & salads
- a favourite for Italian cuisine
- main export destinations are: UK, Central America and Caribbean, South America

Kintoki

- red bean
- produced in Ontario
- exported to Japan
- consumed whole as sweetened cooked beans

Otebo

- white bean
- produced in Ontario
- sweet white bean paste
- exported to Japan

by Stan Skrypetz, Pulse and Special Crops Analyst

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While the Market Analysis Division assumes responsibility for all information contained in this bulletin, we wish to gratefully acknowledge input from the following: Ontario Bean Producers' Marketing Board; Pulse Canada; Saskatchewan Agriculture, Food and Rural Revitalization; United States Department of Agriculture; Market and Industry Services Branch (AAFC)