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This is to certify that the
thesis entitled
AN ANALYSIS OF TRENDS IN THE US. COMMON BEAN
INDUSTRY WITH IMPLICATIONS FOR INTERNATIONAL
TRADE
presented by
3
3 r
V m '8 JAIME GUSTAVO PUENTE ASQUET
2 a a:
m ”.3
H E q
-‘ .2 :2
2 has been accepted towards fulfillment
of the requirements for me
MS. degree in

 

Agricultural Economics

Majér‘Professor’s Signature

/',A 2 D.

Date

 

MSU Is an Afﬁrmatlve Action/Equal Opportunity Institution

 

M

PLACE IN RETURN BOX to remove this checkout from your record.
TO AVOID FINES return on or before date due.
MAY BE RECALLED with earlier due date if requested.

 

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W88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2/05 cztc'ﬁC/Dateouejmms

 

AN ANALYSIS OF TRENDS IN THE U.S. COMMON BEAN INDUSTRY
WITH IMPLICATIONS FOR INTERNATIONAL TRADE

By
Jaime Gustavo Puente Asquet

A Thesis
Submitted to
Michigan State University

in partial fulﬁllment of the requirements
for the degree of

MASTER OF SCIENCE
Department of Agricultural Economics

2005

ABSTRACT

AN ANALYSIS OF TRENDS IN THE U.S. COMMON BEAN INDUSTRY
WITH IMPLICATIONS FOR INTERNATIONAL TRADE

By
Jaime Gustavo Puente Asquet

Exports and imports are strategically important to both the international and
domestic common bean markets. Recent trends in international trade of U.S. common
beans show that the market for U.S. common beans is undergoing signiﬁcant changes
leading to a decrease in exports and an increase in imports. To examine these trends,
trade data were collected with the objective of identifying export and import trends at
the market class and commercial partner level. The relationship between trade,
production, and consumption trends was also explored. The strong relationship
between exports and production brought into the analysis factors determining acreage
trends such as crop proﬁtability and the U.S. Farm Bill as a proﬁtability shifter.

During 1994-2003, U.S. common bean exports decreased as a result of navy
and pinto bean exports decrease. During the period, U.S. common bean imports
signiﬁcantly increased for all the market classes with Canada accounting for most of
the imports and increase. Navy bean export decrease is associated with decreased
production in Michigan and eastern North Dakota, which is caused by more attractive
soybean proﬁtability and risk. The U.S. Farm Bill has improved soybean return and
risk and therefore has boosted the acreage shift from navy bean to soybean
production. Pinto bean export decrease is associated with decreased production in
Idaho, which is caused by better corn proﬁtability and risk, on which the U.S. Farm

Bill has no effect.

DEDICATION

To God for the gift of having you in my life:
Cecilia, Geovanny, Paulina, Pedro David, Geovanna Carolina, Stephita. ..

Miguelito and Anne.

iii

ACKNOWLEDGEMENTS

I would like to thank Dr. Richard Bemsten for his invaluable professional and
personal support during this research and my stay at Michigan State University. I
learned from his enthusiasm and tireless effort to conduct applicable research. I am
also extremely grateful to Dr. David Schweikhardt for his tremendous contribution to
this research. Dr. James Kelly to the highest degree complemented this research team
with his profound knowledge of the U.S. bean industry.

I also would like to thank to other people that contributed to this research with
data, knowledge, and ideas: Bob Green from the Michigan Bean Commission, Dr.
Irvin Widders and Dr. Mywish Maredia from the Bean/Cowpea CRSP program, and
Charles Wachsmuth from the U.S. Dry Bean Council.

I am also grateful to all the good friends I met during these years at Michigan
State University. They provided the environment to transform academic activities into
a learning experience.

Finally, I would like to thank my family for all their support that overcomes

the distance and to Anne, my closest family, and the love of my life.

iv

TABLE OF CONTENTS

 

 

 

 

 

 

LIST OF TABLES - xi
LIST OF FIGURES- - xii
CHAPTER ONE 1
INTRODUCTION -- - 1
1.1 BACKGROUND INFORMATION ..................................................................................... 1
1.2 PROBLEM STATEMENT ............................................................................................... 3
1.3 JUSTIFICATION OF THE STUDY .................................................................................... 5
1.4 RESEARCH OBJECTIVES .............................................................................................. 6
1.5 METHODS ................................................................................................................... 7
1.5.1 Shift-share analysis ............................................................................................ 7
1.5.2 Growth rate estimation ....................................................................................... 8

1.5.3 Enterprise Budget Analysis ................................................................................ 8

1.6 THESIS ORGANIZATION .............................................................................................. 9
CHAPTER TWO - -_ - _ -- - 11
UNITED STATES COMMON BEAN INDUSTRY 11
2.1 STRUCTURE OF THE BEAN INDUSTRY IN THE UNITED STATES .................................. 1 1
2.1.1 Farmer Producers ............................................................................................. 11
2.1.2 Elevators .......................................................................................................... 11
2.1.3 Canners ............................................................................................................ 12
2.1.4 United States Dry Bean Council ...................................................................... 13
2.1.5 State Organizations .......................................................................................... 13

2.2 OVERVIEW OF COMMON BEAN INDUSTRY TRENDS .................................................. 15

2.2.1 Common Bean Production ............................................................................... 16
2.2.2 Common Bean Consumption ........................................................................... 18
2.2.3 Common Bean Exports .................................................................................... 20
2.2.4 Common Bean Imports .................................................................................... 21
2.3 COMMON BEAN EXPORT SUPPLY BY MARKET CLASS .............................................. 23
2.3.1 Pinto Beans ...................................................................................................... 23
2.3.1.1 Pinto Bean Production .............................................................................. 23
2.3.1.2 Pinto Bean Consumption .......................................................................... 26
2.3.1.3 Pinto Bean Exports ................................................................................... 27
2.3.1.4 Pinto Bean Imports ................................................................................... 27
2.3.1.5 Summary of Trends and Implications for U.S. Pinto Export Supply ....... 28
2.3.2 Navy Beans ...................................................................................................... 29
2.3.2.1 Navy Bean Production .............................................................................. 29
2.3.2.2 Navy Bean Consumption .......................................................................... 31
2.3.2.3 Navy Bean Exports ................................................................................... 32
2.3.2.4 Navy Bean Imports ................................................................................... 32

2.3.2.5 Summary of Trends and Implications for Potential Navy Export

Supply ................................................................................................................... 33
2.3.3 Kidney Beans ................................................................................................... 34
2.3.3.1 Kidney Bean Production ........................................................................... 34
2.3.3.2 Kidney Bean Consumption ....................................................................... 37
2.3.3.3 Kidney Bean Exports ................................................................................ 38

vi

2.3.3.4 Kidney Bean Imports ................................................................................ 38

2.3.3.5 Summary of Trends and Implications for Potential Kidney Bean

Export Supply ....................................................................................................... 39
2.3.4 Great Northern Beans ...................................................................................... 40
2.3.4.1 Production ................................................................................................. 40
2.3.4.2 Consumption ............................................................................................. 43
2.3.4.3 Great Northern Exports ............................................................................. 44
2.3.4.4 Great Northern Imports ............................................................................. 44

2.3.4.5 Summary of Trends and Implications for Great Northern Export

Supply ................................................................................................................... 45
2.3.5 Black Beans ..................................................................................................... 46
2.3.5.1 Black Bean Production ............................................................................. 46
2.3.5.2 Black Bean Consumption ......................................................................... 48
2.3.5.3 Black Bean Exports ................................................................................... 49
2.3.5.4 Black Bean Imports ................................................................................... 49

2.3.5.5 Summary of Trends and Implications for Potential Black Bean Export

 

Supply ................................................................................................................... 50

2.4 SUMMARY OF THE CHAPTER .................................................................................... 51
CHAPTER THREE - _ - 53
EXPORT TRENDS BY MARKET CLASS AND COMMERCIAL PARTNER ..... 53
3.1 OVERVIEW ............................................................................................................... 53
3.2 COMMON BEAN EXPORTS BY MARKET CLASS ......................................................... 55
3.2.1 Pinto Bean Exports .......................................................................................... 55

vii

3.2.2 Navy Beans Exports ......................................................................................... 59

3.2.3 Kidney Bean Exports ....................................................................................... 63
3.2.4 Great Northern Beans Exports ....... C .................................................................. 66
3.2.5 Black Beans ..................................................................................................... 69
3.3 SUMMARY OF EXPORT TRENDS ................................................................................ 73
3.4 THE MEXICAN CASE ................................................................................................ 74
3.4.1 Production ........................................................................................................ 75
3.4.2 Consumption .................................................................................................... 79
3.4.3 Exports ............................................................................................................. 80
3.4.4 Imports ............................................................................................................. 81
3.4.4.1 Mexican Imports of Dry Beansby Country .............................................. 81
3.4.5 Summary of Trends and Implications for U.S. Exports to Mexico ................. 82
3.5 THE UNITED KINGDOM CASE ................................................................................... 84
3.5.1 Imports ...... 85
3.5.1.1 United Kingdom’s Imports of Common Beans by Country ..................... 86

3.5.2 Summary of Trends and Implications for U.S. Exports to the United

 

Kingdom ................................................................................................................... 87
CHAPTER FOUR I 88
IMPORT TRENDS BY MARKET CLASS AND COMMERCIAL PARTNER ..... 88
4.1 OVERVIEW ............................................................................................................... 88
4.2 COMMON BEAN IMPORTS BY MARKET CLASS ......................................................... 90
4.2.1 Pinto Beans ...................................................................................................... 90

4.2.2 Navy Beans ......................... ' ............................................................................. 9 2

viii

4.2.3 Kidney Beans ................................................................................................... 93

4.2.4 Great Northern Beans ...................................................................................... 96
4.2.5 Black Beans ..................................................................................................... 99
4.2.6 Summary of Import Trends ............................................................................ 102
4.3 THE CANADIAN CASE ............................................................................................ 103
4.3.1 Production ...................................................................................................... 104
4.3.2 Exports ........................................................................................................... 107
4.3.3 Manitoba ........................................................................................................ 108
4.3.4 Production costs in Canada and the United States ......................................... 116
4.3.4.1 Navy bean production costs in Canada and the United States ................ 117
4.4.3.2 Pinto bean production costs in Canada and the United States ................ 119

4.4 SUMMARY .............................................................................................................. 122
CHAPTER FIVE _ -- - - - -- - _ _ - - ....... - _ - _- 124

 

THE EFFECT OF THE U.S. FARM BILL ON UNITED STATES

 

INTERNATIONAL TRADE OF COMMON BEANS _ 124
5.1 ANALYSIS OF BEAN AND SUBSTITUTE CROPS ACREAGE BY STATE .......................... 124
5.1.1 Michigan ........................................................................................................ 124
5.1.1.1 Analysis of the Proﬁtability of Navy Beans and Soybeans .................... 131

5.1.1.2 Conclusions ............................................................................................. 136

5.1.2 Idaho .............................................................................................................. 136
5.1.2.1 Analysis of the Proﬁtability of Pinto Beans vs. Corn ............................. 142

5.1.2.2 Conclusions ............................................................................................. 147

5.1.3 North Dakota .................................................................................................. 147

ix

5.1.3.1 Analysis of the Proﬁtability of Dry Beans and Wheat ........................... 154

 

5.1.3.2 Analysis of the Proﬁtability of Dry Beans and Soybeans ....................... 160

5.1.3.3 Conclusions ............................................................................................. 166

5.2 THE U.S. FARM BILL AND ITS EFFECT ON COMMON BEAN ACREAGE TRENDS ...... 167
5.2.1 The Soybean Program .................................................................................... 168
5.2.1.1 Michigan ................................................................................................. 170
5.2.1.2 North Dakota ........................................................................................... 171

5.2.2 The Corn Program .......................................................................................... 173
5.2.2.1.] Idaho ................................................................................................ 174

5.2.3 The Wheat Program ....................................................................................... 175
5.2.3.1 North Dakota ............................ . ............................................................... 176

5.2.4 Conclusions .................................................................................................... 177

6.1 SUMMARY .............................................................................................................. 179
6.2 CONCLUSIONS AND POLICY RECOMMENDATIONS .................................................. 183
6.3 LIMITATIONS OF THE STUDY AND FUTURE RESEARCH ............................................. 185
APPENDIX -- - - - -- _ 187
LIST OF REFERENCES- - - - _- ..... - _ - -- 192

 

LIST OF TABLES
TABLE 3.1 U.S. COMMON BEAN EXPORTS BY MARKET CLASS, 1994-2003 ...................... 54

TABLE 3.2 ANNUAL DRY BEAN PRODUCTION, CONSUMPTION, AND BALANCE IN

MEXICO, 1993-1999 .................................................................................................. 79
TABLE 4.1 U.S. COMMON BEAN IMPORTS BY MARKET CLASS, 1994-2003 ...................... 89
TABLE 4.2 NUMBER OF FROST-FREE DAYS ....................................................................... 1 13

TABLE 4.3 NAVY BEAN PRODUCTION SELECTED VARIABLE COST IN MANITOBA AND
NORTH DAKOTA, 1999-2003 ................................................................................... 1 18
TABLE 4.4 PINTO BEAN SELECTED VARIABLE COST IN MANITOBA, IDAHO AND NORTH
DAKOTA, 1997-2003 ............................................................................................... 120
TABLE 5.1 NAVY BEAN ACREAGE IN MICHIGAN AND SELECTED COUNTIES, 1994-2003 126
TABLE 5.2 SOYBEAN AND NAVY BEAN SELECTED VARIABLE COST, MICHIGAN, 1992,
1995, 2001 ............................................................................................................... 134
TABLE 5.3 DRY BEAN ACREAGE IN IDAHO AND SELECTED COUNTIES, 1994-2003 ..... 138
TABLE 5.4 PINTO BEAN AND CORN SELECTED VARIABLE COST IN IDAHO, 1997-2003 145
TABLE 5.5 DRY BEAN ACREAGE IN NORTH DAKOTA, 1994-2003 ................................... 148
TABLE 5.6 DURUM, SPRING WHEAT, & DRY BEAN SELECTED VARIABLE COST IN
NORTH DAKOTA, 1994-2003 ................................................................................... 158

TABLE 5.7 SOYBEAN, PINTO, AND NAVY BEAN SELECTED VARIABLE COST IN NORTH

DAKOTA,1994-2003 ................................................................................................ 164
TABLE 5.8 SOYBEAN LOAN RATE, AND TARGET PRICE ..................................................... 169
TABLE 5.9 CORN DIRECT PAYMENT, LOAN RATE, AND TARGET PRICE ........................... 173
TABLE 5.10 WHEAT DIRECT PAYMENT, LOAN RATE, AND TARGET PRICE ...................... 175

Xi

LIST OF FIGURES
FIGURE 2.1 U.S. COMMON BEAN PRODUCTION, CONSUMPTION, AND TRADE, 1994-

2003 ........................................................................................................................... 16

FIGURE 2.2 U.S. COMMON BEAN PRODUCTION AND MARKET CLASS SHARE, 1994-

FIGURE 2.3 U.S. COMMON BEAN PRODUCTION BY MARKET CLASS, 1994-2003 .............. 18

FIGURE 2.4 U.S. COMMON BEAN CONSUMPTION BY MARKET CLASS SHARE, 1994-

2003 ........................................................................................................................... 19
FIGURE 2.5 U.S. COMMON BEAN CONSUMPTION BY MARKET CLASS, 1994-2003 ........... 19
FIGURE 2.6 U.S. COMMON BEAN EXPORTS BY MARKET CLASS SHARE, 1994-2003 ......... 20
FIGURE 2.7 U.S. COMMON BEAN EXPORTS BY MARKET CLASS, 1994-2003 .................... 21
FIGURE 2.8 U.S. COMMON BEAN IMPORTS BY MARKET CLASS SHARE, 1994-2003 ......... 22
FIGURE 2.9 U.S. COMMON BEAN IMPORTS BY MARKET CLASS, 1994-2003 ..................... 22
FIGURE 2.10 U.S. PINTO BEAN PRODUCTION BY STATE, 1994-2003 ................................ 24
FIGURE 2.11 U.S. PINTO BEAN CONSUMPTION, 1994-2003 .............................................. 26
FIGURE 2.12 U.S. PINTO BEAN TRADE, 1994-2003 .......................................................... 28
FIGURE 2.13 U.S. PINTO BEAN POTENTIAL EXPORT SUPPLY, 1989-2004 ......................... 29
FIGURE 2.14 U.S. NAVY BEAN PRODUCTION BY STATE, 1994-2003 ................................ 30
FIGURE 2.15 U.S. NAVY BEAN CONSUMPTION, 1994-2003 .............................................. 32
FIGURE 2.16 U.S. NAVY BEAN TRADE, 1994-2003 ........................................................... 33
FIGURE 2.17 U.S. NAVY BEAN POTENTIAL EXPORT SUPPLY, 1989-2004 ......................... 34
FIGURE 2.18 U.S. KIDNEY BEAN PRODUCTION BY STATE, 1994-2003 ............................. 35
FIGURE 2.19 U.S. KIDNEY BEAN CONSUMPTION, 1994-2003 ........................................... 38

xii

FIGURE 2.20 U.S. KIDNEY BEAN TRADE, 1994-2003 ........................................................ 39

FIGURE 2.21 U.S. KIDNEY BEAN POTENTIAL EXPORT SUPPLY, 1989-2004 ...................... 40
FIGURE 2.22 U.S. GREAT NORTHERN BEAN PRODUCTION BY STATE, 1994-2003 ............ 41
FIGURE 2.23 U.S. GREAT NORTHERN BEAN CONSUMPTION, 1994-2003 .......................... 43
FIGURE 2.24 U.S. GREAT NORTHERN BEAN TRADE, 1994-2003 ...................................... 45

FIGURE 2.25 U.S. GREAT NORTHERN BEAN POTENTIAL EXPORT SUPPLY, 1989-2004 ..... 46

FIGURE 2.26 U.S. BLACK BEAN PRODUCTION BY STATE, 1994-2003 ............................... 47
FIGURE 2.27 U.S. BLACK BEAN CONSUMPTION, 1994-2003 ............................................. 49
FIGURE 2.28 U.S. BLACK BEAN TRADE, 1994-2003 ......................................................... 50
FIGURE 2.29 U.S. BLACK BEAN POTENTIAL EXPORT SUPPLY, 1989-2004 ....................... 51
FIGURE 3.1 U.S. COMMON BEAN EXPORTS BY MARKET CLASS, 1994-2003 .................... 53
FIGURE 3.2 U.S. COMMON BEAN EXPORTS BY MARKET CLASS, 1994-2003 .................... 55
FIGURE 3.3 U.S. PINTO BEAN EXPORTS BY COUNTRY, 1994-2003 ................................... 56
FIGURE 3.4 U.S. PINTO BEAN EXPORTS AND COUNTRY SHARE, 1994-2003 ..................... 57
FIGURE 3.5 U.S. NAVY BEAN EXPORTS BY COUNTRY, 1994-2003 ................................... 60 I
FIGURE 3.6 U.S. NAVY BEAN EXPORTS BY COUNTRY, 1994-2003 ................................... 61
FIGURE 3.7 U.S. KIDNEY BEAN EXPORTS BY COUNTRY, 1994-2003 ................................ 64
FIGURE 3.8 U.S. KIDNEY BEAN EXPORTS AND COUNTRY SHARES, 1994-2003 ................ 65
FIGURE 3.9 U.S. GREAT NORTHERN BEAN EXPORTS BY COUNTRY, 1994-2003 ............... 67
FIGURE 3.10 U.S. GREAT NORTHERN BEAN EXPORTS BY COUNTRY, 1994-2003 ............. 68
FIGURE 3.11 U.S. BLACK BEAN EXPORTS BY COUNTRY, 1994-2003 ................................ 70
FIGURE 3.12 U.S. BLACK BEAN EXPORTS BY COUNTRY, 1994-2003 ................................ 71

FIGURE 3.13 U.S. BEAN EXPORTS TO MEXICO BY SELECTED CLASSES, 1994-2003 ......... 75

xiii

FIGURE 3.14 MEXICAN DRY BEAN PRODUCTION, YIELD, AND HARVESTED AREA,
1994-2003 ................................................................................................................. 76

FIGURE 3.15 MEXICAN DRY BEAN PRODUCTION AND ANNUAL RAINFALL, 1994-2003 77

FIGURE 3.16 MEXICAN PLANTED AND HARVESTED AREA FOR BEANS, 1989-2004. ......... 78

FIGURE 3.17 TOTAL AND PER CAPITA CONSUMPTION FOR DRY BEANS IN MEXICO,

1994-2003. ................................................................................................................ 80
FIGURE 3.18 IMPORTS AND EXPORTS FOR COMMON BEANS IN MEXICO, 1994-2003. ....... 81
FIGURE 3.19 MEXICAN DRY BEAN IMPORTS BY COUNTRY, 1995-2003. ........................... 82

FIGURE 3.20 DRY BEAN PRODUCTION, CONSUMPTION, IMPORTS AND EXPORTS IN
MEXICO, 1994-2003 .................................................................................................. 83
FIGURE 3.21 MEXICAN DRY BEAN PRODUCTION AND IMPORTS, 1989-2004 .................... 84

FIGURE 3.22 U.S. DRY BEAN EXPORTS TO UNITED KINGDOM, SELECTED CLASSES,

1994-2003 ................................................................................................................. 85
FIGURE 3.23 UNITED KINGDOM’S NAVY AND KIDNEY BEAN IMPORTS, 1994-2003. ........ 86
FIGURE 3.24 U.K. IMPORTS FROM SELECTED COUNTRIES, 1994-2003. ............................ 87
FIGURE 4.1 U.S. COMMON BEAN IMPORTS BY MARKET CLASS, 1994-2003 ..................... 88
FIGURE 4.2 U.S. COMMON BEAN IMPORTS BY MARKET CLASS, 1994-2003 ..................... 90
FIGURE 4.3 U.S. PINTO BEAN IMPORTS BY COUNTRY, 1994-2003 .................................... 91
FIGURE 4.4 U.S. NAVY BEAN IMPORTS BY COUNTRY, 1994-2003 .................................... 93
FIGURE 4.5 U.S. KIDNEY BEAN IMPORTS BY COUNTRY, 1994-2003 ................................. 94
FIGURE 4.6 ORIGIN OF U.S. KIDNEY BEAN IMPORTS, 1994-2003 ..................................... 95
FIGURE 4.7 U.S. GREAT NORTHERN BEAN IMPORTS BY COUNTRY, 1994-2003 ................ 97

xiv

FIGURE 4.8 U.S. GREAT NORTHERN BEAN IMPORTS BY COUNTRY OF ORIGIN, 1994-

2003 ........................................................................................................................... 98
FIGURE 4.9 U.S. BLACK BEAN IMPORTS BY COUNTRY OF ORIGIN, 1994-2003 ................. 99
FIGURE 4.10 ORIGIN OF U.S. BLACK BEAN IMPORTS, 1994-2003 ................................... 100
FIGURE 4.11 U.S. BEAN IMPORTS FROM CANADA, SELECTED CLASSES, 1994-2003 ...... 103

FIGURE 4.12 CANADIAN BEAN PRODUCTION, YIELD, AND HARVESTED AREA, 1994-

2002 ......................................................................................................................... 104
FIGURE 4.13 .................................................................................................................... 106
FIGURE 4.14 CANADIAN DRY BEAN EXPORTS, 1994-2003 ............................................. 108
FIGURE 4.15 BEAN ACREAGE IN MANITOBA, 1994-2003 ................................................ 109
FIGURE 4.16 BEAN ACREAGE IN MANITOBA BY MARKET CLASS, 2003 ............................ 109
FIGURE 4.17 NAVY BEAN YIELD IN MANITOBA AND MICHIGAN, 2001-2003 ................. 110
FIGURE 4.18 PINTO BEAN YIELD IN MANITOBA AND MICHIGAN, 2001-2003 ................. 1 l 1
FIGURE 4.19 DRY BEAN AND SUGAR BEET ACREAGE IN MANITOBA, 1994-2003 ........... 1 14

FIGURE 4.20 NAVY BEAN SELECTED VARIABLE COST IN MANITOBA AND NORTH

DAKOTA, 1999-2003 ............................................................................................... 1 19
FIGURE 4.21 PINTO BEAN PRODUCTION SELECTED VARIABLE COST IN MANITOBA,

IDAHO AND NORTH DAKOTA, 1997-2003 ................................................................ 121
FIGURE 5.1 ANALYSIS OF COUNTY NAVY BEAN ACREAGE IN MICHIGAN AND

SELECTED COUNTIES, 1994-2003 ............................................................................. 125
FIGURE 5.2 ...................................................................................................................... 127
FIGURE 5.3 NAVY BEAN AND SOYBEAN ACREAGE IN TUSCOLA COUNTY, MICHIGAN,

1994-2003 ............................................................................................................... 128

XV

FIGURE 5.4 NAVY BEAN AND SOYBEAN ACREAGE IN SANILAC COUNTY, MICHIGAN,
1994-2003 ............................................................................................................... 129

FIGURE 5.5 NAVY BEAN AND SOYBEAN ACREAGE IN BAY COUNTY, MICHIGAN, 1994-

2003 ......................................................................................................................... 130
FIGURE 5.6 NAVY BEAN AND SOYBEAN PRICES IN MICHIGAN, 1994-2003 ..................... 132
FIGURE 5.7 NAVY BEAN AND SOYBEAN YIELD IN MICHIGAN, 1994-2003 ...................... 133

FIGURE 5.8 COSTS OF SOYBEAN AND NAVY BEAN PRODUCTION, MICHIGAN, 1992,
1995, 2001 ............................................................................................................... 135
FIGURE 5.9 RETURNS ABOVE VARIABLE COSTS PER ACRE FOR NAVY BEANS AND
SOYBEANS IN MICHIGAN, 1992, 1995,2001 ............................................................ 136
FIGURE 5.10 BEAN ACREAGE IN IDAHO AND SELECTED COUNTIES, 1994-2003 ............. 137
FIGURE 5.11 BEAN AND CORN ACREAGE IN TWIN FALLS COUNTY, IDAHO, 1994-2003 . 139

FIGURE 5.12 BEAN AND CORN ACREAGE IN CANYON COUNTY, IDAHO, 1994-2003 ....... 140

FIGURE 5.13 BEAN AND CORN ACREAGE IN JEROME COUNTY, IDAHO, 1994-2003 ........ 141
FIGURE 5.14 PINTO BEAN AND CORN PRICES IN IDAHO, 1994-2003 ............................... 143
FIGURE 5.15 PINTO BEAN AND CORN YIELD IN IDAHO, 1994-2003 ................................ 144

FIGURE 5.16 PINTO BEAN AND CORN SELECTED VARIABLE COST IN IDAHO, 1997-2003 145
FIGURE 5.17 RETURN ABOVE SELECTED VARIABLE COST PER ACRE FOR PINTO BEAN

AND CORN IN IDAHO, 1997-2003 ............................................................................. 146
FIGURE 5.18 DRY BEAN ACREAGE IN NORTH DAKOTA, 1994-2003 ............................... 148
FIGURE 5.19 DRY BEAN AND WHEAT ACREAGE IN WELLS COUNTY, NORTH DAKOTA,

1 994-2003 ............................................................................................................... 149

xvi

FIGURE 5.20 DRY BEAN & DURUM WHEAT ACREAGE IN BENSON COUNTY, NORTH

DAKOTA, 1994-2003 ............................................................................................... 150
FIGURE 5.21 DRY BEAN AND SOYBEAN ACREAGE IN TRAILL COUNTY, NORTH

DAKOTA, 1994-2003 ............................................................................................... 152
FIGURE 5.22 DRY BEAN & SOYBEAN ACREAGE IN GRAND FORKS COUNTY, NORTH

DAKOTA, 1994-2003 ............................................................................................... 153
FIGURE 5.23 NAVY, PINTO, DURUM, & SPRING WHEAT PRICES IN NORTH DAKOTA,

1994-2003 ............................................................................................................... 155
FIGURE 5.24 NAVY, PINTO, DURUM, & SPRING WHEAT YIELD IN NORTH DAKOTA,

1994-2003 ............................................................................................................... 156
FIGURE 5.25 DURUM, SPRING WHEAT, & DRY BEAN SELECTED VARIABLE COST IN

NORTH DAKOTA, 1994-2003 ................................................................................... 157
FIGURE 5.26 RETURN ABOVE SELECTED VARIABLE COST PER ACRE FOR DURUM,

SPRING WHEAT, PINTO, AND NAVY BEAN IN NORTH DAKOTA, 1994-2003 ............. 159
FIGURE 5.27 SOYBEAN, PINTO, AND NAVY BEAN PRICES IN NORTH DAKOTA, 1994-

2003 ......................................................................................................................... 161
FIGURE 5.28 SOYBEAN, PINTO, AND NAVY BEAN YIELD IN NORTH DAKOTA, 1994-

2003 ......................................................................................................................... 162
FIGURE 5.29 SOYBEAN, PINTO, AND NAVY BEAN SELECTED VARIABLE COST IN NORTH

DAKOTA, 1994-2003 ............................................................................................... 163
FIGURE 5.30 RETURN ABOVE SELECTED VARIABLE COST PER ACRE FOR SOYBEAN,

PINTO, AND NAVY BEAN IN NORTH DAKOTA, 1994-2003 ....................................... 165

xvii

FIGURE 5.31 NAVY, AND SOYBEAN GROSS REVENUE PER ACRE AND THE EFFECT OF
THE U.S. FARM BILL IN MICHIGAN, 1994-2003 ....................................................... 170
FIGURE 5.32 PINTO, NAVY, AND SOYBEAN RETURN ON SELECTED VARIABLE COST PER
ACRE AND THE EFFECT OF THE U.S. FARM BILL IN NORTH DAKOTA, 1994-2003 172
FIGURE 5.33 PINTO BEAN AND CORN RETURN ON SELECTED VARIABLE COST AND THE
EFFECT OF THE U.S. FARM BILL IN IDAHO, 1997-2003 ............................................ 174
FIGURE 5.34 PINTO, NAVY, DURUM, AND SPRING WHEAT RETURNS ABOVE SELECTED
VARIABLE AND FIXED COST PER ACRE AND THE EFFECT OF THE U.S. FARM BILL

IN NORTH DAKOTA, 1994-2003 ............................................................................... 176

xviii

CHAPTER ONE
INTRODUCTION
1.1 Background Information

International markets are important for the U.S. economy, especially for U.S.
agriculture. In recent years, the U.S. --the largest exporter of agricultural products--
exported 22% to 26% of its domestic agricultural output (World Bank, 2004).
Agricultural exports not only provide employment for 765,000 Americans but also
lead to higher farm prices and greater return to producers (FAS, 2002; Benson et a1,
1998). However, the importance of agricultural products, as a percent of total exports,
declined from 14.0% in 1993 to 10.6% in 2002 (World Bank, 2004).

In 2003, U.S. food and agricultural product imports accounted for only 4.6%
of total imports (World Bank, 2004). However, the share of imported agricultural
products, classiﬁed as competitive with domestic production, increased from 66% in
the 19703 to 77% in the 19905. Thus, foreign competition and market instability in
some sectors has resulted in declining market prices and lower returns (Benson et a1,
1998).

Recent trends in the U.S. dry bean industry clearly reﬂect the general trend in
the U.S. agricultural sector. Any change in the competitiveness of the U.S. dry bean
industry will have signiﬁcant impacts since, according to the Census of Agriculture,
approximately 11,000 farms produce a total of 1.1 million metric tons per year of dry
beans on 1.7 million acres (Lucier, 2001. ERS, 2004). The U.S. dry beans subsector

relies heavily on overseas markets, as it exports 28.3% of the subsector’s total output

(U SITC, 2004‘). While imports of dry beans constitute only a small fraction of
domestic production (7%), imports have dramatically increased during the past
decade.

Several factors have impacted bean trade, including changes in trade policies,
economic growth rates among trade partners, exchange rate ﬂuctuations, and the
emergence of new competition (Benson et a1, 1998). Although dry beans have not
been covered under price support programs since the late 19603, U.S. farm programs
have had an indirect effect on the bean sector. For example, the 2002 U.S. Farm Bill
distorts farmers’ production decision by improving soybean proﬁtability and risk.
Also, the USDA regularly buys dry pack and canned beans for school lunch, child
nutrition, and other feeding programs, which also affects the dynamics of dry bean
sector (Lucier, 2001).

Dry beans include all the Phaseolus species (P. vulgaris L., P. Iunatus L., P.
acutifolius A. Gray, P. mango L., P. coccineus), Vigna species (V. unguiculata L.),
Cicer arietinum (chickpea/garbanzo), and Cyamosis tetragonolobus. However, most
of the beans in the genus Phaseolus belong to the species vulgaris, widely known as
common beans (AAF C, 2002). This species includes the market classes of greater
commercial importance to the U.S. such as pinto, navy, great northern, kidney, dark
red kidney, light red kidney, black, cranberry, and small red. “Generally the term
common beans indicate beans of the Phaseolus vulgaris species that are produced as

dry edible beans or as snap beans” (Copeland, 20052). Common beans represent

 

' USITC Interactive Tariff and Trade Database belongs to the U.S. International Trade Commission.
2 Copeland, L. Professor Emeritus, Department of Crop and Soils Science, Michigan State University.
Personal communication. January 2005

89.2% of the U.S. dry bean production and 81.3% of U.S. dry bean exports (USITC,
2004)
1.2 Problem Statement

The U.S. is the sixth-leading producer of dry beans --behind Brazil, India,
China, Burma, and Mexico (Hansen 2003). While common beans represent only a
small Share of dry bean production in India, China, and Burma, 89.2% of U.S. bean
production corresponds to common beans. India mostly produces round beans (20%
of the world total) and chickpeas (two-thirds of the world total), and China mostly
produces ﬂat beans (50% of the world total) (USDA, 2002). Other countries that
produce important quantities of common beans are Brazil and Mexico; however these
countries produce mostly for their domestic market. On the other hand, the U.S.
exports 28.3% of its total production --an average of 343,769 Mt per year-- which
makes the U.S. the largest exporter of common beans in the world (USITC 2004).

Even though, the U.S. continues to be the top exporter of common beans, U.S.
exports have shown a downward trend in recent years. In the period 1994-2003, U.S.
exports of common beans decreased at an annual rate of 1.7%. The decreasing trend
is even higher after 1998 (U SITC 2004).

The decrease in exports is not the only trend of concern to the U.S. bean
industry. In the past decade, imports of common beans to the U.S. increased by
284.2%, from 35,341 Mt (mean, 1994-1996) to 135,790 Mt (mean, 2001-2003)

(U SITC 2004). Moreover, this dramatic growth (21.2% growth rate per year)

corresponds mostly to market classes that are produced in the U.S.

The U.S. bean industry relies heavily on exports sales. Shippers of common
beans count on exports to absorb over 20% of supplies, while other industries such as
fresh, canned, and frozen vegetables export only an average of 8% of the production
(USDA, 2002). Therefore, a decrease in exports, as well as import growth,
compromises the future of the U.S. bean industry.

U.S. bean production is concentrated in ﬁve states, which produce 77.2% of
the total output. Therefore, the agriculture sector in these states «North Dakota
(which accounts for 35.0% of the total bean production), Michigan (16.3%),
Nebraska (1 1.5%), Minnesota (8.2%), and Idaho (6.2%)-- depends heavily on the
performance of the bean industry.

Players in the bean industry are awareof these export and import trends.
However, little research has been conducted to document U.S. bean trade trends and
to identify factors shaping U.S. exports and imports. Moreover, trade trends are
usually analyzed in a low level of disaggregation (e.g. dry beans), which oﬁen hides
the true trends that are only observable at the market class level. In order to develop
strategies for responding to these trends, players in the industry and policy makers
need better information about the nature of these trends. Thus, this study focuses on
identifying and explaining the main trends in U.S. exports and imports of common
beans at the market class level:

In order to identify export and import trends, this study analyses U.S. bean
trade data for the period 1994-2003. The period 1994-2003 was selected since this
period best represents recent trade trends. Trade data were collected at the ten digits

level of the Harmonized System, which allowed compiling trade information at the

market class level. On the exports side, an in depth analysis of trade with the United
Kingdom and Mexico, two of the U.S. main export partners, is included. Common
bean export trends and their relationship with production and consumption trends are
analyzed. In order to approach the relationship between U.S. exports and production,
factors determining cr0p acreage trends are analyzed, such as crop proﬁtability and
the U.S. Farm Bill as a proﬁtability shifter. On the imports side, an analysis of
Canada --the main U.S. competitor in both the international and domestic market-- is
included.

1.3 Justification of the study

U.S. agriculture is twice as reliant on export markets, compared to the general
economy. This reliance, measured as exports divided by farm cash receipts, is rising
at a faster rate than other sectors of the economy. In fact, agriculture’s export
dependency rose from 22% to 26% in the 19905 (F AS 2002). The U.S. bean industry
also relies heavily on overseas markets, exporting 28.3% of the domestic production.
Clearly, research on export and import trends and the factors determining these trends
is necessary to guide marketing activities by the industry and policy making by the
government.

The focus of this thesis «identifying trends in international trade of U.S.
common beans and understanding the factors shaping U.S. exports and importS-- is
justiﬁed by the importance of trade in the bean industry, the importance of this
industry in the U.S. economy, and the need of market information.

This study contributes to the literature by documenting trends in U.S. common

bean trade at the level of market class, disaggregated by commercial partner. The

study also represents the ﬁrst attempt to assess the effect of U.S. Farm Bill on bean
trade.

This study generates information that beneﬁts: 1) the U.S. bean industry, by
providing insight on trends that must be addressed in marketing efforts, 2)
government decision-makers, by assessing the indirect effect of government policies
on beans, a commodity that is not included under the Farm Bill, and 3) other
researchers, by documenting a method for analyzing trends in commodity imports and
exports.

1.4 Research objectives

The general objective of this study is to describe U.S. trade in common beans
through the identiﬁcation and analysis of export and import trends by market class
and commercial partner, to link these trends with U.S. common bean export supply
trends, and to assess the effect of the U.S. Farm Bill on the bean sector.

The speciﬁc objectives of this study are to:

1) Describe the U.S. common bean industry, including trends in: a) beans
export supply by market class (production, consumption, trade), and b) marketing
(channels and procedures to export beans). The objective of describing the U.S.
common bean industry in terms of its export supply is to identify factors that might
explain export and import trends.

2) Identify U.S. export trends by market class and commercial partner, explain
these trends in terms of import demand of main export partners, and analyze U.S.

exports of beans to Mexico and United Kingdom (main export partners).

3) Identify U.S. import trends by market class and commercial partner,
explain these trends in terms of import demand of main import partners, and analyze
U.S. imports of beans from Canada (main import partner).

4) Assess the effect of the U.S. Farm Bill on bean production and accept or
refute the hypothesis that the U.S. Farm Bill has impacted U.S. bean production,
based on an analysis of: a) acreage shifts from bean production to other crops
protected under the policy, and b) the proﬁtability of bean production and substitute
crops under policy protection.

1.5 Methods
1.5.1 Shift-share analysis

Shift-share analysis is a technique that identiﬁes growth differentials, based
on the changes that have occurred in market shares over time (Green and Allaway,
1985). Shift-share analysis identiﬁes the relative Size of the gains or losses of
markets, compared with the general trend for all the markets in its group (Huff and
Sherr, 1967). In other words, shift-share analysis identiﬁes a positive trend only if the
analyzed market has grown faster than the average and vice versa. Therefore, shift-
share analysis overcomes the problems of traditional trend analysis methods, which
mostly rely on the assessment Of absolute and relative change. In general, methods
based on the analysis of absolute changes tend to overestimate growth of large
markets, while methods based on the analysis of relative change tend to overestimate
growth of small markets.

In this study, the shift-share method is used in Chapters Two through Five. In

Chapter Two, shift-share analysis is used to analyze common bean production by

market class at the state level. In Chapters Three and Four, shift-share analysis is used
to analyze trends at the market class and commercial partner level for exports and
imports respectively. Finally, in Chapter Five shift-share analysis is used to assess
acreage trends at the county level. For a description of this methodology, see section
2.3.1.1
1.5.2 Growth rate estimation

Growth rates are calculated to measure the increase or decline in production,
consumption, prices, exports, and imports. Therefore, annual growth rates are
reported throughout this document. Annual growth rates are calculated to account for
changes that occurred between 1994 and 2003. Although, growth rates are estimated
using three different methods, all the annual growth rates reported in this document
are calculated following an exponential growth method. For a description of this
methodology, see section 2.2. 1.
1.5.3 Enterprise Budget Analysis

Enterprise budgets are Statements of the income and expenses of a productive
farm activity on a per unit basis. The difference between income and the cash expense
measures how much the enterprise contributes to paying overhead costs and
generating proﬁt. This difference is commonly called gross margin or Return above
Selected Variable Costs (Harsh et al, 1981).

In this study, enterprise budget information is used in Chapters Four and Five.
In Chapter Four, enterprise budget information is used to compare production costs in
selected Canadian and U.S. bean-growing regions for navy and pinto beans. In

Chapter Five, enterprise budget information is used to compare navy and pinto bean

returns against acreage-competing crops returns, as well as the effect of the U.S. Farm
Bill on acreage-competing crops proﬁtability. For a description of this methodology,
see section 4.3.4

1.6 Thesis Organization

The thesis is divided into six chapters. Chapter One, which provides the
introduction to the study, is divided in six sections. The ﬁrst section provides general
information about how the U.S. bean industry has evolved in recent years. The second
section identiﬁes the issues that the study addresses. Then arguments are provided to
justify the need to analyze U.S. international trade of beans. The fourth section states
the general and speciﬁc objectives the study pursues. The ﬁfth section describes the
data analysis methods used. The ﬁnal section provides a brief outline of the study.

Chapter Two, which is divided in two sections, provides an overview of the
U.S. bean industry. The ﬁrst section describes the structure of the U.S. bean industry.
Section two analyzes U.S. common bean exports supply through an analysis of
production, consumption, and trade trends at both the common bean and the market
class level.

Chapter Three identiﬁes export trends by market class and major trade
partners in each category. The chapter includes a detailed description of export
behavior and growth rates for common beans and for all market classes. In each case,
the major trading partners are identiﬁed and analyzed. The chapter concludes with an
analysis of trends in production, consumption, trade, and import demand in Mexico
and United Kingdom --the U.S.’s major export partners, and countries that shape U.S.

exports of beans.

Chapter Four is the equivalent of Chapter Three for the imports side. The
chapter includes an analysis of trends in production, consumption, trade, and export
supply in Canada --the main supplier of U.S. imports and the country that has taken
away U.S. market shares in important export markets.

Chapter Five analyzes the effect of the U.S. Farm Bill on U.S. bean
production. The objective of this analysis is to accept or refute the hypothesis that
farm policy has structurally changed U.S. bean acreage. This chapter includes an
analysis of acreage trends for beans and other crops that are likely to replace for bean
production. The proﬁtability of these acreage-competing crops with and without
policy protection is assessed, to determine if policy protection is a reason for acreage
shifts.

Finally, Chapter Six summarizes the study and discusses the policy
implications of the results. A statement of the limitations and proposed further

research is also included.

10

CHAPTER TWO -
UNITED STATES COMMON BEAN INDUSTRY

2.1 Structure of the Bean Industry in the United States

There are three key players in the dry bean industry in the United States:
farmer producers, elevators, and canners. Each of these players represents an
important and sequential stage in the dry bean supply chain. After production,
farmers sell beans to elevators, where they are subsequently cleaned and sorted. The
elevators sell the beans to baggers and canners, who process the beans into a variety
of ﬁnal products for consumers. The following section provides an overview of the
structure of the U.S. bean industry, including market coordination and the use of
contracts.
2.1.1 Farmer Producers

The 1997 Census of Agriculture revealed that 10,911 U.S. farms produced dry
beans on 1.7 million acres (USDA, 2001). The states with the highest production of
dry beans were North Dakota (comprising 27% of total U.S. production), Michigan
(18%), Nebraska (12%), Colorado (8%), Minnesota (8%), and California (7%). Dry
bean production is cyclical over time, responding to ﬂuctuations in the economy and
consumer preferences. Another important factor related to dry bean production is that
it has intensive management requirements, compared to other crops (Belshe er al,
2001).
2.1.2 Elevators

A 2001 survey of 35 grain elevator managers revealed that elevators only

forward contract with growers if the elevator had a contract with a canner (Belshe et

11

‘1

tn. A

al, 2001). Furthermore, the survey found the number of contracts varied annually,
depending on supply and demand factors. While Belshe argued the high cost of dry
bean production and price uncertainty leads to a contractible commodity, Chambers
(1999) argued that production contracts are not necessary for dry beans. He further
argued that elevator managers believe that education programs with producers are
more effective than production contracts. Chamber concluded that production
contracts may be necessary if the ﬁnal intended use requires high product
speciﬁcations and testing is either not available or prohibitively expensive.

Elevators are responsible for sorting, cleaning, grading, and packing beans for
transport. The USDA has established quality speciﬁcations for dry beans that include
moisture content, broken seeds, uniformity of. size, color, and speciﬁcation of foreign
matter (Schumacher, 2003).

2.1.3 Canners

A study of coordination in the dry bean industry revealed that canners desire
high degrees of seed integrity, so that the bean maintains its shape and appearance
aﬁer canning (Chambers, 2002). Since testing technology to assess seed integrity
does not yet exist, seed coat checks are used instead. The USDA does not have a
quality speciﬁcation for seed coat checking, nor is there a standard measure for seed
coat checks. Seed coat checks identify breaks or tears in the seed coat which can be
difficult to identify. Thus, lack of a standard measure for seed coat check can be
problematic for canners. Also, acceptable seed coat speciﬁcations depend upon the

intended use of the bean. Beans that are to be canned require few breaks in the seed

12

coat, while seed coat imperfections do not matter for beans that are to be processed
into refried beans.
2.1.4 United States Dry Bean Councill

Another important component of the dry bean industry is the United States
Dry Bean Council (U SDBC), which “represents both U.S. exporters and international
dry bean importers to promote awareness of the nutrition, quality, and versatility of
U.S. dry beans.” The United States Dry Bean Council publishes the U.S. Dry Bean
Council Suppliers Directory, which provides information about buyers and producers
of U.S. dry beans. The USDBC has offices in Washington State, Washington DC,
France, Japan, Mexico, and Spain. Appendix 4 and 5 lists U.S. ﬁrms engaged in the
dry bean industry, the type of beans with which they are afﬁliated, and the ﬁrms’
classiﬁcation.
2.1.5 State Organizations

Various state organizations help organize the combined efforts and
interactions of producers, elevators, and canners. The state organizations also assist
in the coordination of dry bean exports.
California

California produces seven bean market classes: baby lima beans, blackeye
beans, dark red kidney beans, garbanzo beans, large lima beans, light red kidney
beans, and pink beans. Two state organizations represent the dry bean industry in
California. The California Bean Shippers Association engages in promotional

programs for California dry bean products and the California Dry Bean Advisory

 

' The information for the following section draws heavily from the information provided within the
Directory of U.S. Dry Bean Suppliers compiled by the United States Dry Bean Council. The reference
to this directory can be found in the reference section of this paper.

13

 

Board facilitates trade communication between domestic and international buyers of
California dry bean products.
Idaho

Idaho produces eight bean market classes: black beans, dark red kidney beans,
great northern kidney beans, light red kidney beans, navy beans, pinto beans, small
red beans, and small white beans. Two state organizations are charged with
promoting the bean industry: the Western Bean Dealers Association and the Idaho
Bean Commission, which engages in research, seed production, and the marketing
and promOtion of dry edible beans.
Michigan

Michigan produces eleven bean market classes: adzuki beans, black beans,
cranberry beans, dark red kidney beans, great northern beans, light red beans, navy
beans, otebo beans, pinto beans, small red beans, and yellow eye beans. Two state
organizations represent the interests of the Michigan dry bean industry. The
Michigan Bean Commission Director is appointed by the Governor and directs the
development, promotion, and production research of Michigan beans. The Michigan
Bean Shippers Association supports Michigan producers to market their beans.
Minnesota/North Dakota/Wisconsin

Together, Minnesota, North Dakota, and Wisconsin produce ten bean market
classes: black beans, cranberry beans, dark red kidney beans, light red kidney beans,
great northern beans, navy beans, pink beans, pinto beans, small red beans, and small
white beans. Two organizations represent the interests of the Minnesota, North

Dakota, and Wisconsin dry bean industries. The North Central Bean Dealers

14

 

Association represents the elevator community in these three states. The Northarvest
Bean Growers Association engages in research to increase the use of bean products
ﬁom these three states.
New York

New York produces two bean market classes: black beans and light red kidney
beans. The New York State Bean Shippers Association promotes the New York dry
bean industry.
Rocky Mountain Areas

The interests of dry bean producers from Arizona, Colorado, Kansas,
Montana, Nebraska, New Mexico, Texas, Utah, and Wyoming are represented by
three organizations: the Colorado Dry Bean Administrative Committee, the Nebraska
Dry Bean Commission, and the Rocky Mountain Bean Dealers Association.
2.2 Overview of Common Beanl Industry Trends

During 1994-2003, the U.S. common bean industry produced an average of
1.1 million Mt of common beans per year. Even though 72.4 % of the U.S. common
bean production was consumed domestically (0.8 million Mt), the U.S. was a leading
player in the common bean international market, exporting an average of 0.3 million
Mt (29.8% of domestic production). Though U.S. common bean imports have grown
constantly in recent years, imports averaged only 0.07 million Mt (6.1% of the

domestic production) (Figure 2.1).

 

' Common beans are beans in the genus Phaseolus, species vulgaris and include the following market
classes: pinto, navy, great northern, kidney, dark red kidney, light red kidney, black, cranberry, dried
pink, white, small red, and other common beans.

15

Figure 2.1 U.S. Common Bean Production, Consumption, and Trade, 1994-2003

  
 

 

 
 

 

 

 

 

1,600 -

L400 ‘ Production

1,200 -
‘5‘ 1'000 ‘ Consumption
§ 800 a
‘- 600 .

400 * EXWW

20° ‘ Imports m

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: NASS (2005), ERS (2005), USITC (2005)
2.2.1 Common Bean Production
During 1994-2003, the U.S. produced an average of 1.1 million Mt (CV=
15.7%) of common beans per year, ranging from a minimum of 767,033 Mt in 2001
to a maximum of 1,362,590 Mt in 1999. During the period, common bean production
decreased at an annual rate1 of 2.8%, from 1.2 million Mt (mean, 1994-1996) to 1.0

million Mt (mean, 2001-2003) (Figure 2.1).

 

I Annual grth rates were estimated through three methods to evaluate growth or decline trends in
the time series data collected for common beans. A brief description of the three methods used to
estimate rates of growth follows:

a) Following the approach of Pingali 2001 grth rates were estimated using the following log-linear
regression model: In (y) = ,8] + ,th + 8,. Where ln(y) is the natural logarithm of y, t is time period in
years, ,6] is a constant, a, is the error term, and ,8] the growth rate of y. This ﬁInction describes the log
of the variable y in terms oft with a constant proportional rate of growth (ﬂ;>0) or decay (,62<0). [3;
might be interpreted as the annual percentage change in y. The model assumes stationarity of the data
set which is a constraint since several time series show non-stationarity. Stationarity was tested using
Augmented Dickey-Fuller unit-root test, Phillips-Perron unit roots test, and DF-GLS test for unit root.
Most of the datasets do not show autocorrelation problems as evidenced by Durbin-Watson test. This
model attempts to account for stationarity by differencing the variable y. The differenced variable
shows a constant proportional rate of growth (ﬂ,>0) or decay (,6,<0). B , might be interpreted as the
annual percentage change in y. The model achieves in many cases stationarity of the data set.
Stationarity was tested using Augmented Dickey-Fuller unit-root test, Phillips-Perron unit roots test,
and DF-GLS test for unit root. Datasets do not show autocorrelation as evidenced by Durbin-Watson
test.

16

‘I

Over the decade, common bean production was distributed among pinto beans
(45%), navy beans (20%), kidney beans (9%), great northern beans (8%), black beans
(8%), and other common beans (10%) (Figure 2.2).

Figure 2.2 U.S. Common Bean Production and Market Class Share, 1994-2003

Other common beans
10% l

   
 

Black beans
8%

Kidney beans I: :3". ‘-: Pinto beans
' ' ' 45%

N... be...
20%
Source: NASS (2005)
During the decade, only black bean production increased (Show positive
growth rate), while the production of navy, kidney, pinto, great northern, and other
common beans declined (negative growth rate) over the decade. A complete analysis

of consumption trends by market class is included in section 2.2 (Figure 2.3).

 

b) A second log-linear regression model was used to estimate growth rates: In (y) - In (y,_,) = ,8] + 5,.
Where In (y) is the natural logarithm of y, In (y,.,) is the natural logarithm of y at time H, t is time
period in years, a, is the error term, and [I] the growth rate of Y. This model attempts to account for
stationarity by differencing the variable y. The diﬁ‘erenced variable shows a constant proportional rate
of growth (,6,>0) or decay (ﬂ,<0). B, might be interpreted as the annual percentage change in y. The
model achieves in many cases stationarity of the data set. Stationarity was tested using Augmented
Dickey-Fuller unit-root test, Phillips-Perron unit roots test, and DF-GLS test for unit root. Most of the
datasets do not show autocorrelation problems as evidenced by Durbin-Watson test

c) Following exponential growth theory, which assumes that the value of a variable y increases in ever-
decreasing time periods, growth rates were estimated using the following formula: GR = [(Yt/Yo)"l/r] -
l . Where Y! is the mean of exports in the last three years of the analysis (2001-2003), Yo is the mean of
exports in the ﬁrst three years of the analysis (1994-1996), and t is the number of years between Yr and
Y0 (7 years). This method proved to estimate a growth rate that best ﬁtted the data in most cases;
therefore, results obtained through this method are reported in the discussion of the study.

Figure 2.3 U.S. Common Bean Production by Market Class, 1994-2003

700-

Pinto

600 4
500 —
400 -

1000 Mt

300 «
200 ~

 

100 J

 

 

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: NASS (2005)
2.2.2 Common Bean Consumption

During 1994-2003, common bean consumption averaged 842,530 Mt (CV=
3.5%), ranging from a minimum of 805,330 Mt in 1996 to a maximum of 893,927 Mt
in 2002. Common bean consumption increased at an annual rate of 0.7% -—from
822,050 Mt (mean, 1994-1996) to 863,940 Mt (mean, 2001-2003) (Figure 2.1).
During the period, common bean consumption was distributed among pinto beans
(50%), navy beans (19%), other common beans (10%), kidney beans (8%), black

beans (7%), and great northern beans (6%) (Figure 2.4).

18

Figure 2.4 U.S. Common Bean Consumption by Market Class Share, 1994-2003

Other common beans
10% ’

    
   
  
  

Black beans
7%

Kidney beans

8°/

° Pinto beans

Great Northern beans 50%

6% , ..... {3.5 2‘

Navy beans
19%

Source: NASS (2005)

During the decade, black, great northern, pinto, and other bean consumption
increased while navy and kidney bean consumption declined. A complete analysis of
consumption trends by market class is included in section 2.2 (Figure 2.5).

Figure 2.5 U.S. Common Bean Consumption by Market Class, 1994-2003

500 -
450 Pinto

400 _ W
350 -
300 -
250 - Navy
200 —

150 -
100 - Kidney Black

-!"i\¢
50- m . "r

Great Northern

1000 Mt

 

 

 

 

‘ r I I r r I 7%

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: NASS (2005)

2.2.3 Common Bean Exports

During 1994-2003, the U.S. exported an average of 346,093 Mt (CV= 14.6%),
ranging from a minimum of 297,698 Mt in 2003 to a maximum of 473,444 Mt in
1998. From 1994 to 2003, conrrnon bean exports decreased at an annual rate of 1.7%
--from 343,361 Mt (mean, 1994-1996) to 304,370 Mt (mean, 2001-2003) (Figure
2.1). During the decade, common bean exports were distributed among navy beans
(26%), pinto beans (25%), kidney beans (18%), other common beans (13%), great
northern beans (11%), and black beans (7%) (Figure 2.6).

Figure 2.6 U.S. Common Bean Exports by Market Class Share, 1994-2003

Other common beans
13%

Black
7%

- Pinto
. 25%

  
    
 

Kidney
18%

  
 

* ‘ Navy
Great Northem 26%
1 1%
Source: NASS (2005)
During the decade, black and great northern bean exports increased, while

navy, pinto, kidney, and other bean exports declined. A complete analysis of

consumption trends by market class is included in section 2.2 (Figure 2.7).

20

1”"“1

Figure 2.7 U.S. Common Bean Exports by Market Class, 1994-2003

140

120 -

1 00
80

1000 Mt

40
20

60-

 

Pinto
A ‘\
' Navy
Kidney -' I ‘

Great Northern

Black

 

# I T T r

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: NASS (2005)

2.2.4 Common Bean Imports

During 1994-2003, U.S. common bean imports averaged 71,070 Mt (CV=

66.9%), ranging from a minimum of 30,920 Mt in 1994 to a maximum of 160,538 Mt

in 2002. Common bean imports increased sharply at an annual rate of21.2% --from

35,341 Mt (mean, 1994-1996) to 135,790 Mt (mean, 2001-2003) (Figure 2.1).

Over the decade, common bean imports were distributed among other

common beans (55%), kidney beans (15%), pinto beans (11%), navy beans (10%),

and black beans (9%) (Figure 2.8). Chapter Four will further discuss the high share of

other beans in common bean imports.

21

Figure 2.8 U.S. Common Bean Imports by Market Class Share, 1994-2003

Source: NASS (2005)

Pinto
11%

Navy

1 0%

Great Northern
0%

   

Kidney
15%

Black
9%

During the decade, imports of all the market classes increased: black, navy,

great northern, kidney, pinto, and other common beans. A complete analysis of

import trends by market class is included in section 2.2 (Figure 2.9).

Figure 2.9 U.S. Common Bean Imports by Market Class, 1994-2003

90
80
70
60
50

1000 Mt

30
20
10

4o-

  

Pinto, Navy,
Kidney. Black

 

 

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

+ Pinto —I— Navy —~ Kidney -—I— Black —A— Other

Source: NASS (2005)

22

2.3 Common Bean Export Supply by Market Class
2.3.1 Pinto Beans
2.3.1.1 Pinto Bean Production

During 1994-2003, U.S. pinto bean production averaged 524,533 Mt
(CV=14.1%) per year, ranging from a minimum of 397,250 Mt (2001) to a maximum
of 658,799 Mt (1998), as shown in Figure 2.10. During this period, pinto bean
production decreased by 10.2% in relative terms (i.e. decrease as percentage of the
initial value) «falling from 545,996 Mt (mean, 1994-1996) to 490,184 Mt (mean,
2001-2003), equal to a negative annual rate of 1.5%.

During the period, four states accounted for over 80% of pinto bean
production; North Dakota (45.7%), Colorado (16.9%), Nebraska (1 1.2%), and Idaho

(7.3%). Shift-share analysisI indicated that Colorado, Nebraska, and Idaho accounted

 

l Shift-share analysis measures the relative gains and losses of individual markets compared to the
total market between a starting (t-l) and a last (1) period. For the computation of shift-share the
following calculations have to be done:

Actual change = difference for every individual market between (t) and (H).

AVI = Vt: - via-I

Therefore, the following relationships exist;

Actual change < 0 market experienced decline

Actual change > 0 market experienced increase

Actual change = 0 market remained unchanged

Total market change = the difference for the total market between (I) and (H).

AVTM = VTMI - VTM,t-1

Rate of total market change = Total market change / Total market at (l-l).

K = AVTM / th4

Expected change = Rate of total market change "' every individual market at (H). This is the
hypothetical value if the market would have maintained the same share.

EIAV.) = K r V...

Net shiﬁ = Actual change - Expected change. This is the deviation from the value if the market would
have remained unchanged.

NS = AVi - E(AV,)

Total absolute net shift = Sum of positive net shifts. This is the total absolute net shiﬁ.

INS = 2 NS‘

Shift-share = Net shift / Total absolute net shift. This is the relative gain or loss of market share for a
market

SS = NS / INS

In Chapter Two shift-share method was used in the analysis of bean production by state at the market
class level. The method eliminates over or under estimation problems for states that account for large

23

for 78.7% of the decline in pinto bean production, while North Dakota accounted for
85.7% of the increase (Appendix 1). As a result, signiﬁcant changes occurred in these
states’ production during the period (Figure 2.10). Therefore, an analysis of trends in
pinto bean production in the main producing states is needed to fully understand
recent bean production trends.

Figure 2.10 U.S. Pinto Bean Production by State, 1994-2003

700

 

600

/\
500' &/\./ \___ /\

 

 

 

 

 

 

 

 

 

 

5
\

g 400 \/
C
° 300
E North Dakota K\/\ V/ [\\
‘2’ 200
IL

100 v - Wcmorado Nebraska

Idaho

 

ﬂ

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: NASS (2004)
Colorado
During 1994-2003, Colorado produced an average of 88,725 Mt (CV=29.9%)
of pinto beans per year, ranging from a minimum of 46,807 Mt (2003) to a maximum
of 132,205 Mt (1994). Colorado, which accounted for most of the decrease (50.5%)
in total pinto bean production, decreased at an annual rate of 8.6% «from 108,688 Mt

(mean, 1994-1996) to 58,157 Mt (mean, 2001-2003). As a result, Colorado’s share of

 

or small shares of total production of a market class. Therefore, shift-share identify and measure states
that are generating growth (gaining market share) and states that are contributing to decline (loosing
market share).

24

pinto bean production fell by 39% «from 19.9% (mean, 1994-1996) to 11.9% (mean,
2001-2003).
Idaho

During 1994-2003, Idaho produced an average of 38,250 Mt (CV=30.1%) of
pinto beans per year, ranging from a minimum of 23,653 Mt (2001) to a maximum of
64,196 Mt (1994). Idaho, which accounted for 19.7% of the decrease in pinto bean
production, decreased at an annual rate of 7.1% «from 50,863 Mt (mean, 1994-1996)
to 31,312 (mean, 2001-2003). Idaho’s share of pinto bean production fell by 33%,
from 9.3% (mean, 1994-1996) to 6.2% (mean, 2001-2003).
Nebraska

During 1994-2003, Nebraska produced an average of 58,521 Mt (CV=24.9%)
of pinto beans per year, ranging from a minimum of 34,005 Mt (2000) to a maximum
of 78,043 Mt (1994). Nebraska, which accounted for 8.4% of the decrease in pinto
bean production, decreased at an annual rate of 3. 1%, from 71,021 Mt (mean, 1994-
1996) to 57,174 Mt (mean, 2001-2003). Nebraska’s share of pinto production fell by
11% «from 13.0% (mean, 1994-1996) to 11.6% (mean, 2001-2003).
North Dakota

During 1994-2003, North Dakota produced an average of 239,939 Mt
(CV=19.8%) of pinto beans, which increased from 213,713 Mt (mean, 1994-1996) to
258,750 Mt (mean, 2001-2003) --equal to an annual growth rate of 2.8%. Although,
North Dakota’s production growth slowed in recent years, this state still accounted

for most of the growth in this market class.

25

2.3.1.2 Pinto Bean Consumption

During 1994-2003, aggregatel pinto bean consumption averaged 422,052 Mt
(CV=5.0%) per year, which increased at an annual rate of 0.9%, from 394,611 Mt
(mean, 1994-1996) to 438,888 Mt (mean, 2001-2003), as shown in Figure 2.11. Pinto
beans accounted for 41.9% of the increase in common bean consumption and its share
of total consumption increased from 48.0% (mean, 1994-1996) to 50.8% (mean,
2001-2003).

During the decade, per capita pinto bean consumption averaged 3.38
pounds/person (CV= 2.6%), and increased at an annual rate of 0.2% --from 3.30
pounds/person (mean, 1994-1996) to 3.35 pounds/person (mean, 2001-2003) (Figure
2.11). Due to growth in per capita consumption and the relative importance of this
market class (45.5% of common bean consumption), pinto beans accounted for 42.1%
of the increase in total consumption of common beans.

Figure 2.11 U.S. Pinto Bean Consumption, 1994-2003

500 4.5
Total

450 consumptiW- 4.0
400 W .. 3.5
350 -

 

 

 

 

 

 

 

 

 

 

 

’E

a o
s E
o 9
§ S
v 3
g P . — 3.0 i
a 300 er capIta E
E consumptIon __ 2 5 a
a - a
g 250 g
o + 2.0 °
3 200 I!
8 '3.
,2 150 «A 1.5 3
b

100 . T . T 1.0 8

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: USDA (2004)

 

' Aggregate consumption equals per capita consumption (USDA) "' population (Bureau of the Census).

26

2.3.1.3 Pinto Bean Exports

During 1994-2003, the U.S. exported an average of 84,974 Mt (CV=24.4%)
of pinto beans per year --equal to 16.2% of pinto bean production. However, during
the decade pinto beans accounted for 32.9% of the decrease in common bean exports.
Pinto bean exports decreased at an annual rate of 3.7%, falling from 97,480 Mt per
year (mean, 1994-1996) to 74,465 Mt per year (mean 2001-2003), as Shown in Figure
2.12.
2.3.1.4 Pinto Bean Imports

During 1994-2003, the U.S. imported an average of 7,681 Mt (CV=54%) of
pinto beans per year «equal to 1.8% of pinto bean consumption. During the decade,
pinto bean imports grew at an annual rate of 14.0% «from 4,345 Mt per year (mean,
1994-1996) to 10,886 Mt per year (mean, 2001-2003). However, pinto bean imports
showed the smallest rate of growth among all market classes, during a period when
total common bean imports increased at an annual rate of21.9%. Consequently, rapid
growth of other market classes decreased pinto beans’ share of total imports from

12.8% (mean, 1994-1996) to 8.02% (mean, 2001-2003) (Figure 2.12).

27

Figure 2.12 U.S. Pinto Bean Trade, 1994-2003

 

140.00
120.00
A EXpOI'IS A
100.00
./ \ / \
80.00 /\

 

 

 

 

i“
E 60.00 V
IE 40.00

 

Imports

201“) .____.—__—_______’_____,L.____,/”/‘\\\\_______“‘_

- I I I I I T I M

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

 

 

 

 

Source: USITC (2004)
2.3.1.5 Summary of Trends and Implications for U.S. Pinto Export Supply
From 1994 to 2003, pinto bean production decreased at an annual rate of
1.5%. While domestic pinto bean production decreased, total consumption increased
at an annual rate of 0.9%. The deﬁcit caused by the decrease in production and
increase in consumption contributed to the increase in imports, which increased at an
annual rate of 14%. While pinto imports still accounted for a negligible share of
domestic market equivalent to 1.57% of consumption, the deﬁcit reduced the quantity
of pinto beans the U.S. was able to offer to the export market; its potential export
supply].
Over the decade, potential export supply was erratic, compared to actual
exports (Figure 2.13). Domestic carryover stocks allow the industry to absorb

variations in the potential export supply and thereby sustain a more consistent level of

 

' Potential export supply = domestic production + imports — consumption. Potential export supply is
deﬁned as the quantity of beans that the U.S. can either export or store as carryover. The objective of
computing potential export supply is to analyze trends in the quantities of beans available for exports.

28

exports. However, the negative trend in potential export supply explains the decrease
in actual pinto bean exports. Further analysis of this decreasing trend is presented in
Chapter Three.

Figure 2.13 U.S. Pinto Bean Potential Export Supply, 1989-2004

700.0 -
600.0 - Production
500.0 -
400.0 ~

Consumption'

300.0 4

  

1000 Mt

   

Potential export
supplv“

200.0 -

  

100.0 1

 

(100.0) — 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
‘ Aggregate consumption = per capita consumption * population
1‘" Potential export supply = domestic production + imports - consumption
Source: USITC (2004), USDA (2004).
2.3.2 Navy Beans
2.3.2.1 Navy Bean Production

During 1994-2003, navy bean production averaged 228,258 Mt per year
(CV=34.31%), ranging from a minimum of 78,327 Mt (2001) to a maximum of
332,056 Mt (1995), as Shown in Figure 2.14. During this period, navy bean
production decreased at an annual rate of 8.2%-- from 281,283 Mt (mean, 1994-1996)
to 154,572 Mt (mean, 2001-2003).

During 1994-2003, three states accounted for over 92% of navy production;

Michigan (40.9%), North Dakota (36.3%), and Minnesota (16.7%). Shift-share

analysis indicated that Michigan accounted for 89.4% of the decline in navy bean

29

production, while North Dakota and Minnesota accounted for 93.7% of the increase
(Appendix 1). As a result of these trends, signiﬁcant changes occurred in these states’
production During (Figure 2.14). Therefore, an analysis of trends in navy bean
production in the main producing states is needed to fully understand recent
production trends.

Figure 2.14 U.S. Navy Bean Production by State, 1994-2003

350

250 4(/ U.S. / \

,,, \ / \ /\
AM... v ,. \ / \
100 / \\ A - V A \
50 M

' 1 r T

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

 

 

 

 

 

 

Production (1000 Mt)

 

 

 

 

Source: NASS (2004)
Michigan

During 1994-2003, Michigan produced an average of 93,533 Mt (CV=59.1%)
per year, ranging from a minimum of 7,71 8 Mt (2001) to a maximum of 179,330 Mt
(1995). Michigan accounted for most of the decrease (89.5%) in total navy bean
production, decreasing at an annual rate of 17.9%-- from 143,767 Mt (mean, 1994-

1996) to 36,048 Mt (mean, 2001-2003). Therefore, Michigan’s share of navy

production fell by 54%, from 51.1% (mean, 1994-1996) to 23.3% (mean, 2001-2003).

30

Minnesota

During 1994-2003, Minnesota produced an average of 38,218 Mt
(CV=19.6%) per year, ranging from a minimum of 27,785 Mt (2003) to a maximum
of 51,211 Mt (2002). During the period, Minnesota’s navy production increased at an
annual rate of 0.9%-- from 34,897 Mt (mean, 1994-1996) to 37,122 Mt (mean, 2001-
2003). Minnesota accounted for 37.4% of the increase in navy bean production,
increasing its share from 12.4% (mean, 1994-1996) to 24.0% (mean, 2001-2003).
North Dakota

During 1994-2003, North Dakota produced an average of 82,878 Mt
(CV=23.9%) per year of navy beans, ranging from a minimum of 52,846 Mt in 2003
to a maximum of 115,997 Mt in 1999. During the period, North Dakota’s navy bean
production decreased at an annual rate of 1.9%, from 83,824 Mt (mean, 1994-1996)
to 73,109 Mt (mean, 2001-2003). Although, North Dakota’s production decreased
During the period, the rate of decrease was considerably less than the decrease in total
U.S. navy bean production (8.2% per year).
2.3.2.2 Navy Bean Consumption

During 1994-2003, aggregatel navy bean consumption averaged 159,027 Mt
(CV=17.2%) per year, which decreased at an annual rate of 2.4%, from 188,509 Mt
(mean, 1994-1996) to 141,393'Mt (mean, 2001-2003), as shown in Figure 2.15. Navy
beans accounted for most of the decline (90.8%) in common bean consumption. Navy
bean’s share of total consmnption decreased from 22.9% (mean, 1994-1996) to 16.4%

(mean, 2001-2003)

 

' Aggregate consumption = per capita consumption (USDA) "' population (Bureau of the Census).

31

During the decade, per capita navy bean consumption averaged 1.28 pounds
(CV= 20.6%), which decreased at an annual rate of 5.3%-- from 1.58 pounds (mean,
1994-1996) to 1.08 pounds/person (mean, 2001-2003) (Figure 2.15). Navy bean
accounted for most of the decrease (90.9%) in U.S. per capita common bean
consumption.

Figure 2.15 U.S. Navy Bean Consumption, 1994-2003

 

300 3.00

250

 

 

200 .

 

100

 

v Per capita
consumption 0.50

U!
0

 

Total consumption (1000 Mt)
a:
O
Per capita consumption (lblporson)

 

 

 

0 ﬁ ﬁ 7

1994 1995 1996 1997‘1998I199912000'20011200212003

Source: USDA (2004)
2.3.2.3 Navy Bean Exports

During 1994-2003, the U.S. exported 89,406 Mt (CV=18.7%) of navy beans
per year ranging from a minimum of 89,991 Mt in 2003 to a maximum of 116,206 Mt
in 1999. Navy beans accounted for 35.2% of the decrease in common bean exports,
which decreased at an annual rate of 4.0%-- from 93,041 Mt per year (mean, 1994-
1996) to 69,727 Mt per year (mean 2001-2003), as shown in Figure 2.16.
2.3.2.4 Navy Bean Imports

During 1994-2003, the U.S. imported 7,656 Mt (CV=74.1%) of navy beans

per year, ranging from a minimtnn of 1,238 Mt (1994) to a maximum of 16,710 Mt

32

 

(2002). Navy imports grew at an annual rate of 24.5%, which increased from 3,032
Mt per year (mean, 1994-1996) to 14,057 Mt per year (mean, 2001-2003). As a result,
navy bean’s share of total imports increased from 8.6% (mean, 1994-1996) to 10.4%
(mean, 2001-2003) (Figure 2.16).

Figure 2.16 U.S. Navy Bean Trade, 1994-2003

 

 

 

 

 

 

 

 

 

140.00
120.00
Exports /.\_./\
a: 100.00 ‘
E N \
§ 80.00 -\.\.—‘
3' 60.00
1:
1!
I- 40.00
Imports
20.00
- [k - fit/\—

 

 

199411995 11996'19971199811999'2000Y2001 2002 ‘2003

Source: USITC (2004)
2.3.2.5 Summary of Trends and Implications for Potential Navy Export Suppiy

From 1994 to 2003, U.S. navy bean production decreased from 1994 to 2003
at an annual rate of 8.2%. Although, navy bean domestic consumption also decreased
(at an annual rate of 2.4%), production decreased faster than consumption The
deﬁcit, due to the decrease in production, contributed to the increase in navy bean
imports, which increased at an annual rate of 24.5%. While navy imports still
accounted for a negligible share of domestic market (equivalent to 3.4% of

production), the deﬁcit also reduced the quantity of navy beans the U.S. was able to

33

offer to export markets; its potential export supply'. The negative trend in potential
export supply explains the decrease in actual exports of navy beans. Further analysis
of this decrease trend is provided in Chapter Three.

Figure 2.17 U.S. Navy Bean Potential Export Supply, 1989-2004

350.0 -
300.0 3 Production
.2500 ~

2 .0
00 l Consumption

1000 Mt

150.0 .
v
100.0 a AK AExports
50.0 1 Potential export
SUPP'Y“ Imports

I L l
- ﬁr i 1 *ﬁ v v

 

(50.0) J 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
* Consumption = per capita consumption * population
** Potential export supply = domestic production + imports — consumption
Source: USITC (2004), USDA (2004).
2.3.3 Kidney Beans
2.3.3.1 Kidney Bean Production

During 1994-2003, U.S. kidney bean production averaged 101,410 Mt
(CV=16.5%) per year, ranging from a minimum of 68,645 Mt (2001) to a maximum
of 127,483 Mt (1994), as shown in Figure 2.18. During this period, kidney bean
production decreased at an annual rate of 3.0%-- from 108,582 Mt (mean, 1994-1996)

to 87,698 Mt (mean, 2001-2003).

 

' Potential export supply = domestic production + imports - consumption. Potential export supply is
deﬁned as the quantity of beans that the U.S. can either export or store as carryover. The objective of
computing potential export supply is to analyze trends in the quantities of beans available for exports.

34

During 1994-2003, ﬁve states accounted for over 80% of kidney production;
Minnesota (31.4%), Michigan (15.5%), New York (12.2%), Nebraska (11.8%), and
California (9.6%). Shift-share analysis indicated that California accounted for 58.0%
and New York for 23.5% of the decrease in kidney bean production, while Minnesota
and Nebraska accounted for 68.9% of the increase (Appendix 1). An analysis of
trends in kidney bean production in the main producing states follows in order to fully
understand recent production trends.

Figure 2.18 U.S. Kidney Bean Production by State, 1994-2003

 

 

 

 

 

 

 

 

 

140
120 \ -
17 US
3 ..__._ -—~ /T\ N
S 80
g V
g 60
g 40 _ Minnesota
0. W
20 New York
- W

 

199411995 1996 1997 1998 ‘1999 12000 12001 ‘2002 r2003
Source: NASS (2004)
California
During 1994-2003, California produced an average of 9,684 Mt (CV=44.8%)
of kidney beans per year, ranging from a minimum of 3,814 Mt (2003) to a maximum
of 17,615 Mt (1994). California accounted for most of the decrease (58.0%) in total
kidney bean production, which decreased at an annual rate of 13.8%, from 14,195 Mt

(mean, 1994-1996) to 5,009 Mt (mean, 2001-2003). As a result, California’s share of

35

 

kidney production fell by 56%-- from 13.1% (mean, 1994-1996) to 5.7% (mean,
2001-2003).
New York

During 1994-2003, New York produced an average of 12,399 Mt
(CV=32.1%) of kidney beans per year, ranging from a maximum of 19,068 Mt (1997)
to a minimum of 5,539 Mt (2001). New York, which accounted for 23.5% of the
decrease in total kidney bean production, decreased at an annual rate of 6.4%, from
14,725 Mt (mean, 1994-1996) to 9,277 Mt (mean, 2001-2003). As a result, New
York’s share of kidney production fell from 13.6% (mean, 1994-1996) to 10.6%
(mean, 2001-2003).
Nebraska

During 1994-2003, Nebraska produced an average of 11,999 Mt (CV=18.9%)
of kidney beans per year, ranging from a minimum of 9,035 Mt (1996) to a maximum
of 16,571 Mt (1997). During the period, Nebraska’s kidney production increased at
an annual rate of 2.8%-- from 10,200 Mt (mean, 1994-1996) to 12,349 Mt (mean,
2001-2003). Nebraska accounted for 36.9% of the increase in kidney bean
production. As a result its share of U.S. kidney production increased from 9.4%
(mean, 1994-1996) to 14.1% (mean, 2001-2003).
Minnesota

During 1994-2003, Minnesota produced an average of 31,803 Mt
(CV=18.7%) per year of kidney beans per year, ranging from a minimum of 22,655
Mt (1995) to a maximum of 40,724 Mt (2002). During the period Minnesota’s kidney

bean production slightly decreased at an annual rate of 1.3%, from 33,369 Mt (mean,

36

run-“*1

1994-1996) to 30,509 Mt (mean, 2001-2003). Although, Minnesota’s production
decreased during the period, the state’s rate of decrease was slower than the decrease
in total kidney bean production (3.0% per year).
2.3.3.2 Kidney Bean Consumption
During 1994-2003, while aggregatel kidney bean consumption averaged
67,339 Mt per year (CV=6.9%), it decreased at an annual rate of 0.3%, from 67,267
Mt (mean, 1994-1996) to 64,984 Mt (mean, 2001-2003), as shown in Figure 2.19. ,g-u

Kidney beans accounted for 9.2% of the decline in U.S. common bean consumption.

cl.»

As a result, kidney bean’s share of total consumption decreased from 8.2% (mean,
1994-1996) to 7.5% (mean, 2001-2003).

During the decade, while per capita2 kidney bean consumption averaged 0.54
pounds (CV= 9.3%), it decreased at an annual rate of 1.8%-- from 0.56 pounds
(mean, 1994-1996) to 0.50 pounds (mean, 2001-2003) (Figure 2.19). Kidney bean

accounted for 9.1% of the decline in common bean per capita consumption.

‘

; Aggregate consumption = per capita consumption (USDA) " population (Bureau of the Census).
Per capita consumption source: Economic Research Service, USDA.

37

Figure 2.19 U.S. Kidney Bean Consumption, 1994-2003

 

 

 

 

 

 

120 1.20 E
o
a 2
E 1, 0
§ 100 Total 00 3‘}
t' a
S 80 consump ion 0.80 c
E- 60 e, AW 0.60 E
3 Q
a c
g 40 Per capita 0'40 g
- consum tion ..
g 20 p 0.20 g F
- 2
0 T r ' g

 

 

 

IF. .-

1994 19950996 1997'1998119991200012001I200212003
Source: USDA (2004)
2.3.3.3 Kidney Bean Exports

During 1994-2003, the U.S. exported 61,550 Mt (CV=27.1%) of kidney beans
per year, ranging from a minimum of 40,659 Mt in 1995 to a maximtun of 97,893 Mt
in 1998. Kidney bean exports clearly show an upward trend from 1994 to 1998 and a
downward trend from 1998 to 2003. Kidney beans accounted for 2.9% of the
decrease in common bean exports, which decreased at an annual rate of 2.0%, from
56,787 Mt per year (mean, 1994-1996) to 49,287 Mt per year (mean 2001-2003) as
shown in Figure 2.20.
2.3.3.4 Kidney Bean Imports

During 1994-2003, the U.S. imported an average of 11,742 Mt (CV=69.9%)
of kidney beans per year, ranging from a minimum of 4,381 Mt (1994) to a maximum

of 26,391 Mt (2002). Kidney imports grew at an annual rate of 17.4%, which

increased from 6,794 Mt per year (mean, 1994-1996) to 20,822 Mt per year (mean,

38

2001-2003). However, kidney bean’s share of total imports decreased from 19.2%
(mean, 1994-1996) to 15.3% (mean, 2001-2003) (Figure 2.20).

Figure 2.20 U.S. Kidney Bean Trade, 1994-2003

 

120.00

100.00
Ex rts/\
80.00 9°

 

 

 

 

‘2“

8 r/ \

g 60.00 \ - "'

g 40.00 - 1"
Imports/\_

 

 

20.00 ___\__\./\/

I T I

 

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: USITC (2004)

2.3.3.5 Summary of Trends and Implications for Potential Kidney Bean Export
Supply

From 1994-2003, kidney bean production decreased at an annual rate of 3.0%.
Kidney bean domestic consumption also decreased, but at a much smaller rate than
production (0.3%). The deﬁcit, due to the decrease in production might have
contributed to the increase in kidney bean imports, which increased at an annual rate
of 17.4%. Kidney bean imports account for an important share of the domestic market
(27.8% of domestic production in 2003). Therefore, dramatic imports growth reduced
the deﬁcit in the quantity of kidney beans the U.S. was able to offer to the export
market; its potential export supply. The almost steady (slightly negative) trend in
potential export supply may explain the slight decrease in actual exports of kidney

beans. Further analysis of this decrease trend is provided in Chapter Three.

39

Figure 2.21 U.S. Kidney Bean Potential Export Supply, 1989-2004

 
  
 

  
  

140.0 -
120-0 ‘ Production
100.0 4 ‘
5 80°C ‘ Consumption‘ A
g 60.0 ~ \ “ Q ‘
\
40-0 ‘ Potentia
20.0 . export supply
Imports

 

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

* Consumption = per capita consumption * population

** Potential export supply = domestic production + imports — consumption
Source: USITC (2004), USDA (2004).

2.3.4 Great Northern Beans

2.3.4.1 Production

During 1994-2003, great northern bean production averaged 96,561 Mt
(CV=14.6%) per year, ranging from a minimum of 70,733 Mt (2002) to a maximum
of 113,001 Mt (2000) to, as shown in Figure 2.22. Great northern bean production
decreased slightly at an annual rate of 0.3%» from 90,876 Mt (mean, 1994-1996) to
89,014 Mt (mean, 2001-2003).

During 1994-2003, Nebraska accounted for 83.8% of great northern
production. Other great northern-producing states were Idaho (5.6%) and Wyoming
(4.2%). Shift-share analysis indicated that Idaho accounted for 28.5%, Nebraska for
18.1%, and Wyoming for 11.1% of the decrease in great northern bean production.

North Dakota and Michigan, which started producing great northern beans in 2000

and 2001 respectively, accounted for 100% of the increase (Appendix 1). During the

40

ire-mam

period, Colorado and Kansas reduced to zero their great northern bean production. An
analysis of trends in great northern bean production in the main producing states
follows in order to fully understand recent production trends.

Figure 2.22 U.S. Great Northern Bean Production by State, 1994-2003

 

 

 

 

 

 

120
U.S.

80 ‘
g 60 w
a .
3 40
92- Id 11

a o
20
Wyoming

 

 

 

 

' r r r ‘1' r I ‘ r _ I

1994 1995 1996 1997 1998 1999 2000 I 2001 2002 2003

Source: NASS (2004)
Idaho

During 1994-2003, Idaho produced an average of 5,407 Mt (CV=33.1%) per
year, ranging from a minimum of 2,951 Mt (2002) to a maximum of 7,582 Mt (1996).
Idaho accounted for 28.5% of the decrease in total great northern bean production,
which decreased at an annual rate of 7.4%-- from 6,023 Mt (mean, 1994-1996) to
3,511 Mt (mean, 2001-2003). As a result, Idaho’s share of U.S. great northern
production fell by 40%, from 6.6% (mean, 1994-1996) to 3.9% (mean, 2001-2003).
Nebraska

During 1994-2003, Nebraska produced an average of 80,871 Mt (CV=14.0%)
per year, ranging from a minimum of 58,384 Mt (2002) to a maximum of 95,839 Mt

(1999). Nebraska accounted for 18.1% of the decrease in total great northern bean

41

production, which decreased at an annual rate of 0.6%, from 75,939 Mt (mean, 1994-
1996) to 72,867 Mt (mean, 2001-2003). As a result, Nebraska’s share of great
northern production decreased from 83.6% (mean, 1994-1996) to 81.9% (mean,
2001-2003).
Wyoming

During 1994-2003, Wyoming produced an average of 4,095 Mt (CV=49.9%)
per year, ranging from a minimum of 1,271 Mt (2002) to a maximum of 7,309 Mt
(2000). Wyoming accounted for 11.1% of the decrease in total great northern bean
production, which decreased at an annual rate of 5.0% from 3,299 Mt (mean, 1994-
1996) to 2,300 Mt (mean, 2001-2003). As a result, Wyoming’s share of U.S. great
northern production fell from 3.6% (mean, 1994-1996) to 2.6% (mean, 2001-2003).
North Dakota

North Dakota started producing great northern beans in 2000. During 2000-
2003, North Dakota produced an average of 4,790 Mt per year, ranging from a
minimum of 3,768 Mt in 2000 to a maximum 6,219 Mt in 2003. North Dakota
accounted for 61.3% of the increase in great northern bean production. As a result,
North Dakota’s share of great northern production increased from zero to 5.9%
(mean, 2001-2003).
Michigan

Michigan started producing great northern beans in 2001. During 2001-2003,
Michigan produced an average of 3,239 Mt (CV=81.1%) of great northern beans per

year, ranging from 908 Mt in 2001 to 6,083 Mt in 2003. Michigan accounted for

42

 

38.7% of the increases in great northern bean production. As a result, Michigan’s
share of great northern production increased from zero to 3.6% (mean, 2001-2003).
2.3.4.2 Consumption

During 1994-2003, aggregate great northern bean consumption averaged
52,607 Mt (CV=11.8%) per year, which increased at an annual rate of 1.2%, from
50,213 Mt (mean, 1994-1996) to 57,589 Mt (mean, 2001-2003), as shown in Figure
2.23. Great northern bean accounted for 7.7% of the increase in U.S. common bean
consumption. As a result, great northern bean’s share of total consumption increased
from 6.1% (mean, 1994-1996) to 6.7% (mean, 2001-2003).

During the decade, per capita great northern bean consumption averaged 0.42
pounds (CV= 9.7%), which increased at an annual rate of 0.7%» from 0.42 pounds
(mean, 1994-1996) to 0.44 pounds (mean, 2001-2003) (Figure 2.23). Great northern
bean accounted for 7.8% of the increase in per capita common bean consumption.

Figure 2.23 U.S. Great Northern Bean Consumption, 1994-2003

 

 

 

 

 

 

100 1.00 E
A o
s 9

80 0.80 3-
‘§_ Total 3
"' cons m to =
S 60 W- 0.60 g
a: a.
g E

3

a 40 "M 0.40 a
8 Per capita 3
0 consumption 5
'5 20 0.20 '5
° 8
.- I-
0 r r ﬁt I - &

 

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: USDA (2004)

43

2.3.4.3 Great Northern Exports

During 1994-2003, the U.S. exported an average of 39,71 5 Mt (CV=24.8%)
of great northern beans per year, ranging from a minimum of 28,507 Mt in 1996 to a
maximum of 56,010 Mt in 1998. Great northern beans accounted for 48.6% of the
increase in common bean exports, which increased at an annual rate of 5.6%-- from
29,013 Mt per year (mean, 1994-1996) to 43,307 Mt per year (mean 2001-2003), as
shown in Figure 2.24. However, most of the great northern export growth was
associated with food aid. Therefore, an analysis of export partners, which is included
in chapter three, is needed to understand export trends in this market class.
2.3.4.4 Great Northern Imports

Great northern bean imports are negligible. During 1994-2003, the U.S.
imported an average of 327 Mt (CV=110.8%) of great northern beans per year
ranging from a minimum of 20 Mt (2000) to a maximum of 1,122 Mt (1997). During
the decade, great northern imports grew at an annual rate of 19.3%, which increased

from 128 Mt per year (mean, 1994-1996) to 440 Mt per year (mean, 2001-2003).

44

Figure 2.24 U.S. Great Northern Bean Trade, 1994-2003

 

60.0

 

50.0

/\
em/ \ r\/
30.0 A. _ 4/ V

20.0

 

 

 

Trade (1000 Mt)

 

10.0
Imports

 

 

 

 

‘ a r r r ﬁr 1 I I r W

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Source: USITC (2004)
2.3.4.5 Summary of Trends and Implications for Great Northern Export Supplyl

From 1994 to 2003 great northern bean production decreased slightly at an
annual rate of 0.3%. On the other hand, great northern bean domestic consumption
increased at an annual rate of 1.2%. Great northern bean imports grew at an annual
rate of 19.3%, but they still accounted for a negligible share of the market (0.3% of
domestic production). Decreases in production, increases in consumption, and
negligible imports have slightly decreased the amount of great northern beans the
U.S. was able to offer to the export market; its potential export supply. However,
despite the slightly negative trend in potential export supply actual exports of great
northern beans increased over the period. Chapter 3 will explain this trend by

analyzing export partners and the role of food aid in great northern bean exports.

 

' Potential export supply = domestic production + imports - consumption. Potential export supply is
deﬁned as the quantity of beans that the U.S. can either export or store as carryover. The objective of
computing potential export supply is to analyze trends in the quantities of beans available for exports.

45

Figure 2.25 U.S. Great Northern Bean Potential Export Supply, 1989-2004

120.0 1

    
 

Production
100.0 -

80.0 -

Con umption'
60.0 «

1000 Mt

40.0 .

20.0 —

 

 

Imports

T

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

* Consumption = per capita consumption * population
** Potential export supply = domestic production + imports — consumption
Source: USITC (2004), USDA (2004).
2.3.5 Black Beans
2.3.5.1 Black Bean Production

During 1994-2003, black bean production averaged 93,869 Mt (CV=47.9%)
per year, ranging from a minimum of 35,548 Mt (2001) to a maximum of 161,806 Mt
(1998), as shown in Figure 2.26. During this period, black bean production slightly
increased at an annual rate of 0.1%» from 77,437 Mt (mean, 1994-1996) to 78,179
Mt (mean, 2001-2003).

During 1994-2003, two states accounted for over 82% of black bean
production; Michigan (64.2%), and North Dakota (17.9%). Shift-share analysis
indicated that Michigan accounted for 75.8% of the decrease in black bean

production, while North Dakota accounted for 90.6% of the increase (Appendix 1).

Consequently, signiﬁcant changes occurred in these states’ production during 1994-

46

2003 (Figure 2.26). Therefore, an analysis of trends in black bean production in these
states is needed to fully understand recent production trends.

Figure 2.26 U.S. Black Bean Production by State, 1994-2003

 

 

 

 

 

 

 

 

é: ../\\ A
g ,0 /\///\\ /j\\
E 40 WM‘CNQE‘" \\\// \\

1994 r 1995' 1996 1997 1998 1999 U 2000 I 2001 [2002 12003
Source: NASS (2004) I
Michigan

During 1994-2003, Michigan produced an average of 60,269 Mt (CV=50.3%)
of black beans per year, ranging from a maximum of 102,604 Mt (1999) to a
minimum of 15,209 Mt (2001). Michigan accounted for 75.8% of the decline in black
bean production, which decreased at an annual rate of 2.5%-— from 54,934 Mt (mean,
1994-1996) to 46,081 Mt (mean, 2001-2003). As a result, Michigan’s share of black
bean production fell by 17%, from 70.9% (mean, 1994-1996) to 58.9% (mean, 2001-
2003).
North Dakota

During 1994-2003, North Dakota produced an average of 16,753 Mt
(CV=62.1%) of black beans per year, ranging from a minimum of 3,950 Mt (1994) to

a maximum of 37,046 Mt (1998). North Dakota’s black bean production increased at

47

an annual rate of 13.8%» from 7,688 Mt (mean, 1994-1996) to 18,977 Mt (mean,
2001-2003). North Dakota accounted for 90.6% of the increase in black bean
production. As a result, North Dakota’s share of black bean production increased
from 9.9% (mean, 1994-1996) to 24.3% (mean, 2001-2003).
2.3.5.2 Black Bean Consumption

During 1994-2003, aggregate black bean consumption averaged 59,746 Mt
(CV=24.5%) per year, which increased at an annual rate of 4. 1 %, from 43,820 Mt
(mean, 1994-1996) to 70,681 Mt (mean, 2001-2003), as shown in Figure 2.27. Black
bean accounted for 61.3% of the increase in common bean consumption. Black
bean’s share of total consumption increased from 48% (mean, 1994-1996) to 50.8%
(mean, 2001-2003).

During the decade, per capita black bean consumption averaged 0.48 pounds
(CV= 21.8%), increasing at an annual rate of 5.7%, from 0.37 pounds (mean, 1994-
1996) to 0.54 pounds (mean, 2001-2003) (Figure 2.27). Black bean accounted for .

42.3% of the increase in per capita common bean consumption.

48

Figure 2.27 U.S. Black Bean Consumption, 1994-2003

100 1.00

 

 

 

 

 

?
a 8
a 80 0.80 3
§ Total g
5 consumption :
g 60 A A 0.60 g
a a

3
= 40 ~ \ , 0.40 “l
g Per capita §
0 consumption 5
E 20 0.20 '3
° 8
.- h

2

 

 

 

0 a -

- 199411995 1996399711998I1999'2000'2001I2002‘2003

Source: USDA (2004)
2.3.5.3 Black Bean Exports

During 1994-2003, the U.S. exported an average of 25,897 Mt (CV=46.7%)
of black beans per year, ranging from a minimum of 7,961 Mt in 1994 to a maximum
of 46,023 Mt in 1998. Black bean exports, which accounted for 51.4% of the
increase in total common bean exports, increased at an annual rate of 10.6%» from
16,301Mt per year (mean, 1994-1996) to 33,075 Mt per year (mean 2001-2003), as
shown in Figure 2.28.
2.3.5.4 Black Bean Imports

During 1994-2003, the US. imported an average of 6,456 Mt (CV=136.7%)
of black beans per year, ranging from a minimum of 781 Mt (1994) to a maximum of
29,493 Mt (2002). Black bean imports grew at an annual rate of 46. 1%, increasing

from 1,162 Mt per year (mean, 1994-1996) to 16,543 Mt per year (mean, 2001-2003).

49

 

 

a .'
0‘2,

C05

Figure 2.28 U.S. Black Bean Trade, 1994-2003

 

50.0

mm /

20.0 N W

,/ w \
/

A

 

 

 

Trade (1000 Mt)

 

*1

‘ I r r r r r r n r

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

 

 

 

Source: USITC (2004)

2.3.5.5 Summary of Trends and Implications for Potential Black Bean Export
Supply ‘

During 1994-2003, black bean production increased slightly at an annual rate
of 0.1% and while black bean domestic consumption increased at an annual rate of
4.1%. The deﬁcit, due to the slight increase in production and large increase in
consumption, may have contributed to the increase in imports, which increased at an
annual rate of 46. 1%. However, black bean imports still account for a small share of
the market (equivalent to 7% of domestic production). A slight increase in
production, increased consumption, and small imports created a slight downward
trend in the quantity of black beans the U.S. was able to offer to the export market; its

potential export supply. However, despite the slightly negative trend in potential

 

' Potential export supply = domestic production + imports — consumption. Potential export supply is
deﬁned as the quantity of beans that the U.S. can either export or store as carryover. The objective of
computing potential export supply is toanalyze trends in the quantities of beans available for exports

50

export supply actual black bean exports increased, which will be further discussed in

Chapter Three.

Figure 2.29 U.S. Black Bean Potential Export Supply, 1989-2004

1800 ' Production
160.0 —

140.0 .

120.0 - Potential
100.0 _ exHrt supply

80.0 -

33:: v" ”A

' Ex rtsv
20.0 - 9° Imports!

1000 Mt

1 I ._J_
' v r V n ' r

(20.0)-
(40.0)

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

 

* Consumption = per capita consumption * population
** Potential export supply = domestic production + imports — consumption
Source: USITC (2004), USDA (2004)
2.4 Summary of the Chapter

During 1994-2003, total U.S. exports of common beans have decreased as a
result of decrease in navy, pinto, and kidney bean exports. The same market classes;
navy, pinto, and kidney bean account for the reduction in total U.S. production of
common beans. Navy bean production decrease has mainly occurred in Michigan,
while Colorado and Idaho account for the decrease in pinto bean production, and
California accounts for kidney bean production decrease. On the other hand, black
and great northern beans --market classes with little production change» show export
growth. Therefore, a relationship between trade and production trends exists and

production must be analyzed in order to explain trade. Chapter 5 studies production

trends in states with major bean acreage shifts.

51

During 1994-2003, total U.S. imports of common beans have sharply and
constantly increased as a result of increase in all market classes. However, imports
still represent a small share of the market, which decreases their impact on trade
balance. During the period, consumption changes are signiﬁcant for pinto and black

beans (increase) and navy beans (decrease).

52

CHAPTER THREE

EXPORT TRENDS BY MARKET CLASS AND COMMERCIAL PARTNER

3.1 Overview

During 1994-2003, the U.S. was a leading player in the common beanl

market, exporting an average of 346,093 Mt (CV= 14.6%) annually. However, during

the decade U.S. common bean exports decreased at an annual rate of 1.7%» from

343,361 Mt (mean, 1994-1996) to 304,370 Mt (mean, 2001-2003). Export trends

varied by market class. Exports of navy, pinto, kidney, and “other” common beans

decreased while exports of black and great northern bean increased during the period

(Figure 3.1).

Figure 3.1 U.S. Common Bean Exports by Market Class, 1994-2003

500
450
400
350

250

Exports (1000 Mt)

100

50 -

Source: USITC (2005)

 

 

 

 

300 .

200 -
150 « 33;

 

 

so-
cal

on.
on

oo-
.0

 

 

 

 

 

. .
'.'.' _— l.

 

 

0
an
an.
to
one
no
no.
a-
nu.
.-
.00
a.
II.
.-

 

 

an.
r——r..

 

 

 

I-‘O. A—r

 

 

 

 

I-IJ

u...
u..
u...
...
...-
...
...-
.I.I'.
o.-
..u
._...‘
...

'.'.l——

 

 

 

 

 

1994 1995 1996 1997 1998 1999 2000 2001 2002

T

 

I

 

2003

I Other common beans
Black

I Kidney

I Great Northern

a Navy

El Pinto

' Common beans include the following market classes: pinto, navy, great northern, kidney, dark red
kidney, light red kidney, black, cranberry, dried pink, white, small red, and other common beans.

53

Shift-sharel analysis indicated that three market classes accounted for over
70% of the decrease in common bean exports; navy beans (35.2%), pinto beans
(33.0%), and kidney beans (2.9%), while “other” accounted for the residual (28.9%).
From 1994 to 2003, exports of four classes (together) decreased 70,057 Mt. On the
other hand, black beans (51 .4%) and great northern beans (48.6%) accounted for most
of the increases in common bean exports. From 1994 to 2003, exports of these two
market classes (together) increased 31,067 Mt. Therefore, net exports of common
beans decreased by 38,991 Mt. (Table 3.1).

Table 3.1 U.S. Common Bean Exports by Market Class, 1994-2003

 

 

Market Class/Year 1931?: 396 208E303 @3133? 5:53: 3m; 62,?"
(Mt) (Mt) 4 (Mt)
Pinto beans 97,481 74,465 (23,015) -23.61% -32.99% -3.77%
Navy beans 93,041 69,727 (23,314) -25.06% -35.20% 404%
Great Northern 29,013 43,307 14,294 49.27% 48.57% 5.89%
Kidney beans 56,787 49,287 (7,500) 43.21% -2.90% -2.00%
Black beans 16,301 33,075 16,773 102.89% 51.43% 10.64%
Other common 50.737 34.508 (16.228) 61.99% -28.90% -5.36%
Total common beans 343,361 304,370 (38,991) -11.36% 100.00% -1.71%

 

Source: USITC (2005)

As a result of these changes, from 1994 to 2003 the relative importance of

navy, pinto, kidney, and “other” common beans declined, as a share of total common

 

1 In Chapter Three, shift-share analysis was conducted for export data to identify the market classes
that were truly responsible for the increase or decline in U.S. exports. At the market class level, trade
data was analyzed with the shift-share method to identify the trade partners truly responsible for the

growth or decline of the market classes. Shift-share analysis overcomes over and underestimation

problems, which can lead to spurious results in trade analysis due to the variability of shares among
trade partners as percentage of totally quantity traded.

54

bean exports. On the other hand, black and great northern beans increased their
relative shares of total common bean exports (Figure 3.2)

Figure 3.2 U.S. Common Bean Exports by Market Class, 1994-2003

1 994-1 996

 

2001-2003

11% Pinto

 

Source: USITC (2005)
3.2 Common Bean Exports by Market Class
3.2.1 Pinto Bean Exports
During 1994-2003, the U.S. exported an average of 84,974 Mt (CV=24.4%)
of pinto beans per year. While pinto beans are still the most important export market

class, they accounted for 32.9% of the decrease in common bean exports. Pinto bean

55

exports decreased at an annual rate of 3.7%, falling from 97,480 Mt per year (mean,
1994-1996) to 74,465 Mt per year (mean 2001-2003), as shown in Figure 3.3.
During 1994-2003, seven countries accounted for 70% of pinto bean exports
(Figure 3.4). Mexico alone accounted for 31% of total pinto bean exports; year to
year ﬂuctuation in exports to Mexico shaped the pinto export pattern (Figure 3.3).

Figure 3.3 U.S. Pinto Bean Exports by Country, 1994-2003

 

 

 

 

 

140
1 20
D Other countries
g 100 D Dominican Rep
§ 80 Haiti
‘5 I Liberia
g 6° 1: Congo (DROC)
r: 40 I Rwanda
a Mexico
20

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: USITC (2005)

Shift-share analysis indicated that three countries accounted for 57% of the
decrease in pinto bean exports; Rwanda (25.3%), Congo (18.2%), and Liberia
(13.8%). On the other hand, Dominican Republic (30.1%), Haiti (25.4%), and
Mozambique (16.7%) accounted for most of the increase in pinto bean exports
(Figure 3.3). An analysis of trends in pinto bean exports to the six countries that

accounted for signiﬁcant changes follows.

56

Figure 3.4 U.S. Pinto Bean Exports and Country Share, 1994-2003

( Mexico
29% i 31%

   
  

Rwanda
5%
\ Congo
2%
“3‘“ / / \ Liberia
20% Mozambique 2%
2%

Dominican Rep
8% ‘

  

Source: USITC (2005)
Decreasing Exports of Pinto Beans to Rwanda

During 1994-2003, the U.S. only exported signiﬁcant quantities of pinto beans
to Rwanda in 1994 (17,740 Mt) and 1995 (14,096 Mt). Although, Rwanda accounted
for only 4.8% of total exports of pinto beans, it accounted for 25.3% of the decrease
in total pinto bean exports, due to the large quantities exported in 1994 and 1995.1 _
Decreasing Exports of Pinto Beans to Congo

During 1994-2003, the U.S. only exported signiﬁcant quantities of pinto beans
to the Congo in 1995 (17,953 Mt). While the Congo accounted for only 2.2% of total
exports of pinto beans, it accounted for 18.2% of the decrease in total pinto bean
exports, due to the large quantities exported in 1995 as compared to minimal exports

in later years.

 

' During 1995-2003, the U.S. shipped 22,900 Mt of common beans to Rwanda as food aid programs
(FAS, 2005).

57

Decreasing Exports of Pinto Beans to Liberia

During 1994-2003, the U.S. only exported pinto beans to Liberia in 1994
(2,575 Mt), 1995 (6,740 Mt), 1996 (4,643 Mt), and 1998 (2,000 Mt), which
correspond to food aid. While Liberia accounted for only 1.9% of total U.S. exports
of pinto beans, it accounted for 13.8% of the decrease in total pinto bean exports, due
to large quantities of exports in early years of the period. During 1995-2003, the U.S.
shipped to Liberia an average of 1,537 Mt of pinto beans per year as food aid (FAS,
2005)
Increasing exports of Pinto Beans to Dominican Republic

During 1994-2003, the U.S. exported an average of 6,61 8 Mt (CV=62.9%) of
pinto beans per year to the Dominican Republic, ranging from a minimum of 610 Mt
(1996) to a maximum of 15,587 Mt (2003). The Dominican Republic accounted for
7.8% of total exports of pinto beans and for 30.1% of the increase in total pinto bean
exports, Exports to Dominican Republic increased at an annual rate of 20.6%» from
2,629 Mt (mean, 1994-1996) to 9,730 Mt (mean, 2001-2003). Consequently, the
Dominican Republic’s share of pinto exports increased from 2.7% in 1994-1996 to
13.1% in 2001-2003.
Increasing Exports of Pinto Beans to Haiti

During 1994-2003, the U.S. exported an average of 16,878 Mt (CV=32.3%)
of pinto beans per year to Haiti, ranging from a minimum of 8,776 Mt (1996) to a
maximum of 23,609 Mt (1995). Haiti accounted for 19.9% of the total exports of
pinto beans and for 25.4% of the increase in total pinto bean exports. Exports to Haiti

increased at an annual rate of 3.1%» from 13,759 Mt (mean, 1994-1996) to 17,045

58

Mt (mean, 2001-2003). Consequently, Haiti’s share of U.S. pinto exports increased
from 14.1% in 1994-1996 to 22.9% in 2001-2003.
Increasing Exports of Pinto Beans to Mozambique

During 1994-2003, the U.S. only exported signiﬁcant quantities of pinto beans
to Mozambique in 2002 (14,991 Mt), mostly as food aid. In 2002, the U.S. shipped
27,580 Mt of common beans to Mozambique as food aid. While Mozambique
accounted for only 2.4% of the total exports of pinto beans, it accounted for 16.7% of
the increase in total pinto bean exports, due to the large quantity the U.S. shipped in
2002.
3.2.2 Navy Beans Exports

During 1994-2003, the U.S. exported an average of 89,406 Mt (CV=18.7%)
of navy beans per year, ranging from a minimum of 89,991 Mt in 2003 to a maximum
of 116,206 Mt in 1999. Navy beans accounted for 35.2% of the decrease in common
bean exports, decreasing at an annual rate of 4.0%» from 93 ,041 Mt per year (mean,

1994-1996) to 69,727 Mt per year (mean 2001-2003), as shown in Figure 3.5.

59

Figure 3.5 U.S. Navy Bean Exports by Country, 1994-2003

 

140
120
Other countries
g 100 Canada
§ 80 a Mexico
5 1:: Italy
E 60 l Bosnia-Herc
o egov
n. .
ff, 40 E1 Algeria
l United Kingdom
20

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: USITC (2005)

During 1994-2003, six countries alone accounted for over 84% of total U.S.
navy bean exports. The United Kingdom alone accounted for 57.2% of total navy
bean exports (Figure 3.6). Shift-share analysis indicated that four countries accounted
for 88% of the decrease in navy bean exports; United Kingdom (38.0%), Algeria
(33.5%), Bosnia Herzegovina (11.0%), and Italy (6.3%). On the other hand, Canada
(40.7%) and Mexico (25.3%) accounted for most of the increase in navy bean exports
(Figure 3.5). An analysis of trends in navy bean exports to these six countries that

accounted for signiﬁcant changes follows.

60

Figure 3.6 U.S. Navy Bean Exports by Country, 1994-2003

Other countries
1 5%
Canada
8%

Mexico .
7% \ .. ., United Kingdom
Italy 1 i 58%
7%

 

Source: USITC (2005)
Decreasing Exports of Navy Beans to United Kingdom

During 1994-2003, the U.S. exported an average of 51,099 Mt (CV=33%) of
navy beans per year to the United Kingdom, ranging from a minimum of 26,359 Mt
(2003) to a maximum of 79,322 Mt (1997). The United Kingdom accounted for both
most of total U.S. exports of navy beans (57.2%) and for most of the decrease in total
navy bean exports (38.0%). Exports to the United Kingdom decreased at an annual
rate of 6.8%, from 57,078 Mt (mean, 1994-1996) to 34,866 Mt (mean, 2001-2003).
Consequently, the United Kingdom’s share of navy exports fell by 19%» from 61.4%
in 1994-1996 to 49.6% in 2001-2003. Although, navy bean exports decreased in
1994-2003, it is possible to identify two sub periods with different trend behavior.
From 1994 to 1997, U.S. exports of navy beans to the United Kingdom increased
from 47,650 Mt (1994) to 79,322 MT (1997), but, after 1997 they decreased to a

minimum of 26,359 Mt in 2003.

61

Decreasing Exports of Navy Beans to Algeria

During 1994-2003, the U.S. only exported signiﬁcant quantities of navy beans
to Algeria in 1994 (10,566 Mt) and 1995 (17,218 Mt). While Algeria accounted for
only 3.3% of the total U.S. of navy beans, it accounted for 33.5% of the decrease in
total navy bean exports, due to the large quantities exported in 1994 and 1995
compared to later years.
Decreasing Exports of Navy Beans to Bosnia Herzegovina

During 1994-2003, the U.S. only exported signiﬁcant quantities of navy beans
to Bosnia in 1994 (7,651 Mt) and 1999 (5,087 Mt). While Bosnia accounted for only
1.8% of the total exports of navy beans, it accounted for 11.0% of the decrease in
total navy bean exports, due to the large quantities exported in the early years of the
period compared to the later years.
Decreasing Exports of Navy Beans to Italy

During 1994-2003, the U.S. exported an average of 6,579 Mt (CV=57.7%) of
navy beans per year to Italy, ranging from a minimum of 530 Mt (2003) to a
maximum of 12,159 Mt (2000). During the decade, Italy accounted for 7.4% of the
total exports of navy beans and for 6.3% of the decrease in total navy bean exports.
Exports to Italy decreased at an annual rate of 9.1%, from 5,506 Mt (mean, 1994-
1996) to 2,818 Mt (mean, 2001-2003). Italy’s share of U.S. navy exports fell by 34%
from 5.9% in 1994-1996 to 3.9% in 2001-2003. Although, navy bean exports to Italy
decreased during 1994-2003, it is possible to identify two sub periods with different

trend behavior. From 1994 to 1999, exports of navy beans to Italy increased from

62

5,279 Mt (1994) to 12,159 Mt (1999), but, aﬁer 1999 they decreased to a minimum of
530 Mt in 2003.
Increasing Exports of Navy Beans to Canada

During 1994-2003, the U.S. exported an average of 7,162 Mt (CV=84.9%) of
navy beans per year to Canada, ranging from a minimum of 46 Mt (1994) to a
maximum of 17,233 Mt (2003). Canada accounted for 8.0% of the total exports of
navy beans and for 40.7% of the increase in total navy bean exports. Exports to
Canada increased at an annual rate of 28.6%» from 1,672 Mt (mean, 1994-1996) to
9,730 Mt (mean, 2001-2003). Consequently, Canada’s share of navy exports
increased from 1.8% in 1994-1996 to 14.1% in 2001-2003.
Increasing Exports of Navy Beans to Mexico

During 1994-2003, the U.S. exported an average of 6,311 Mt (CV=65.3%) of
navy beans per year to Mexico, ranging from a minimum of 1,656 Mt (1995) to a
maximum of 15,453 Mt (2002). Over the decade, Mexico accounted for 7.1% of the
total exports of navy beans and for 25.3% of the increase in total navy bean exports.
Exports to Mexico increased at an armual rate of 8.3%» from 5,280 Mt (mean, 1994-
1996) to 9,239 Mt (mean, 2001-2003). Consequently, Mexico’s share of navy exports
increased from 5.8% in 1994-1996 to 13.5% in 2001-2003. However, exports of navy
beans to Mexico ﬂuctuated erratically ﬁom 1994 to 2003.
3.2.3 Kidney Bean Exports

During 1994-2003, the U.S. exported an average of 61 ,550 Mt (CV=27.1%)
of kidney beans per year, ranging from a minimum of 40,659 Mt in 1995 to a

maximum of 116,206 Mt in 1999, and then falling to 40,875 Mt in 2003. Kidney

63

beans, which accounted for 2.9% of the decrease in common bean exports, decreased
at an annual rate of 2.0%» from 56,787 Mt per year (mean, 1994-1996) to 49,287 Mt
per year (mean 2001-2003), as shown in Figure 3.7.

Figure 3.7 U.S. Kidney Bean Exports by Country, 1994-2003

 

 

 

100

90 —

80 -
‘5’ 70 '7 I:I Other countries
§ 60 In Italy
5 50 ~ ICanada
g 40 — E1 United Kingdom
& :3 Mexico
I” 30

20

 

10

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: USITC (2005)

During 1994-2003, four countries accounted for over 60% of total kidney
bean exports. Mexico alone accounted for 37.2% of total kidney bean exports (Figure
3.8). Shift-share analysis indicated that three countries accounted for 93% of the
decrease in kidney bean exports; the United Kingdom (56.9%), Italy (28.7%), and
Mexico (7.5%). On the other hand, Canada (51.6%) accounted for most of the
increase in kidney bean exports (Figure 3.7). An analysis of trends in kidney bean

exports to the four countries that accounted for signiﬁcant changes follows.

64

Figure 3.8 U.S. Kidney Bean Exports and Country Shares, 1994-2003

Other countries
29%

   
   

Mexico

37%

Georgia
1%

 
 

_\

   
 

Netheriands

2%

United Kingdom

Italy Canada 7%
7% 10%

Source: USITC (2005)
Decreasing Exports of Kidney Beans to United Kingdom

During 1994-2003, the U.S. exported an average of 4,381 Mt (CV=65.4%) of
kidney beans per year to the United Kingdom, ranging from a minimum of 885 Mt
(2003) to a maximum of 9,029 Mt (1994). Exports to the United Kingdom, which
accounted for 56.9% of the decrease in total kidney bean exports, decreased at an
annual rate of 23.0%» from 7,870 Mt (mean, 1994-1996) to 1,258 Mt (mean, 2001-
2003). Consequently, the United Kingdom’s share of kidney bean exports fell from
13.9% in 1994-1996 to 2.6% in 2001-2003.
Decreasing Exports of Kidney Beans to Italy

During 1994-2003, the'U.S. exported an average of 4,079 Mt (CV=53.2%) of
kidney beans per year to Italy, ranging from a minimum of 949 Mt (2001) to a
maximum of 8,202 Mt (1994). Italy accounted for 6.6% of total exports of kidney
beans, and for 28.7% of the decrease in total kidney bean exports. Exports to Italy

decreased at an annual rate of 12.9%» from 5,774 Mt (mean, 1994-1996) to 2,202 Mt

65

(mean, 2001-2003). Consequently, Italy’s share of kidney exports fell from 10.2% in
1994-1996 to 4.5% in 2001-2003.
Decreasing Exports of Kidney Beans to Mexico

During 1994-2003, the U.S. exported an average of 22,902 Mt (CV=70.5%)
of kidney beans per year to Mexico, ranging from a minimum of 4,301 Mt in 1995 to
a maximum of 61,688 Mt in 1998. However, exports fell to 6,022 Mt in 2003. Over
the decade, Mexico accounted for most (3 7.2%) of the total exports of kidney beans,
and for,7.5% of the decrease in total kidney bean exports. Exports to Mexico
decreased at an annual rate of 2.7%» from 17,929 Mt (mean, 1994-1996) to 14,824
Mt (mean, 2001-2003). Consequently, Mexico’s share of kidney exports fell from
31.6% in 1994-1996 to 30.0% in 2001-2003.
Increasing Exports of Kidney Beans to Canada

During 1994-2003, the U.S. exported an average of 6,1 79 Mt (CV=51.4%) of
kidney beans per year to Canada, ranging from a minimum of 3,906 Mt in 1995 to a
maximum of 14,495 Mt in 1999. However, exports of kidney beans fell to 5,498 Mt
in 2003. Exports to Canada, which accounted for 10.0% of exports of kidney beans
and for most (28.7%) of the increase in kidney bean exports, increased at an annual
rate of 6.1%» from 4,336 Mt (mean, 1994-1996) to 6,573 Mt (mean, 2001-2003).
Consequently, Canada’s share of kidney exports increased from 7.6% in 1994-1996
to 13.3% in 2001-2003.
3.2.4 Great Northern Beans Exports

During 1994-2003, the U.S. exported an average of 39,71 5 Mt (CV=24.8%)

of great northern beans per year, ranging from a minimum of 28,506 Mt in 1996 to a

66

maximum of 56,009 Mt in 1998. Great northern bean exports, which accounted for
48.6% of the increase in total common bean exports, increased at an annual rate of
5.9%» from 29,013 Mt per year (mean, 1994-1996) to 43,307 Mt per year (mean
2001-2003), as shown in Figure 3.9.

Figure 3.9 U.S. Great Northern Bean Exports by Country, 1994-2003

 

 

 

   
  

 

60
50 —— — —
g 40 ____ , I Other countries
g I Iraq
5 30 ., 1:] Algeria
3 I Japan
a 20 El France

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: USITC (2005)

During 1994-2003, three countries accounted for over 56% of total great
northern bean exports: Iraq (20%), France (16%), and Algeria (15%) as shown in
Figure 3.10. Shift-share analysis indicated that two countries accounted for 87% of
the growth in great northern bean exports; Iraq (44.3%) whose exports were shipped
as food aid, and Algeria (43.2%) (FAS, 2005). On the other hand, France (31.0%) and
Japan (10.6%) accounted for most of the decline in great northern bean exports
(Figure 3.9). An analysis of trends in U.S. great northern bean exports to the four

main countries that accounted for signiﬁcant changes follows.

67

Figure 3.10 U.S. Great Northern Bean Exports by Country, 1994-2003

  

31%
Algeria
‘ 15%

Philippines >/
3% /

Source: USITC (2005)
Increasing Exports of Great Northern Beans to Iraq

During 1994-2003, the U.S. exported great northern beans to Iraq in 1997
(31,951 Mt), 1998 (16,054 Mt), and 2003 (30,213 Mt). While Iraq accounted for
19.7% of total U.S. exports of great northern beans it accounted for 44.3% of the
increase in total great northern bean exports, due to the large quantity of exports in
2003 of which 86.9% corresponded to food aid (FAS, 2005).
Increasing Exports of Great Northern Beans to Algeria

During 1994-2003, the U.S. exported an average of 6,154 Mt (CV=99.9%) of
great northern beans per year to Algeria, ranging from a minimum of zero Mt (1995)
to a maximum of 17,667 Mt (2001). Exports to Algeria, which accounted for 43.2%
of the increase in great northern bean exports, increased at an annual rate of 58.4%»
from 417 Mt (mean, 1994-1996) to 10,443 Mt (mean, 2001-2003). Consequently,
Algeria’s share of U.S. great northern exports increased from 1.4% in 1994-1996 to

24.1% in 2001—2003.

68

Decreasing Exports of Great Northern Beans to France

During 1994-2003, the U.S. exported an average of 6,489 Mt (CV=44.4%) of
great northern beans per year to France, ranging from a minimum of 2,293 Mt (2003)
to a maximum of 10,875 Mt (1996). Exports to France, which accounted for 32.7% of
the decrease in total great northern bean exports, decreased at an annual rate of 5.5%-
- from 8,604 Mt (mean, 1994-1996) to 5,792 Mt (mean, 2001-2003). Consequently,
France’s share of great northern exports decreased from 29.6% in 1994-1996 to
13.4% in 2001-2003
Decreasing Exports of Great Northern Beans to Japan

During 1994-2003, the U.S. exported an average of 2,075 Mt (CV=31.9%) of
great northern beans per year to Japan, ranging from a minimum of 1,100 Mt (2001)
to a maximum of 3,070 Mt (1996). Exports to Japan, which accounted for 10.6% of
the decrease in total great northern bean exports, decreased at an annual rate of 8.7%-
- from 2,510 Mt (mean, 1994-1996) to 1,330 Mt (mean, 2001-2003). Consequently,
Japan’s share of great northern exports decreased from 8.7% in 1994-1996 to 3.1% in
2001-2003
3.2.5 Black Beans

During 1994-2003, the U.S. exported an average of 25,897 Mt (CV=46.7%)
of black beans per year, ranging from a minimum of 7,961 Mt in 1994 to a maximum
of 46,023 Mt in 1998. Exports of black beans, which accounted for 51 .4% of the
increase in total U.S. common bean exports, increased at an annual rate of 10.6%--
from 16,301Mt per year (mean, 1994-1996) to 33,075 Mt per year (mean 2001-2003),

as shown in Figure 3.11.

69

Figure 3.11 U.S. Black Bean Exports by Country, 1994-2003

50

45

40
5': 35 I Other countries
2 .

Brazrl

8 30
2 25 I Venezuela
8 I Guatemala
0 20
3 15 121 Costa Rica
ur 13 Mexico

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: USITC (2005)

During 1994-2003, ﬁve countries accounted for 89% of total U.S. black bean
exports. Mexico alone accounted for 74.1% of black bean exports (Figure 3.12).
Shift-share analysis indicated that three countries accounted for 83% of the increase
in U.S. black bean exports; Mexico (47.7%), Guatemala (27.2%), and Costa Rica
(8.7%). On the other hand, Venezuela (48.0%) and Brazil (33.0%) accounted for most
of the decline in black bean exports (Figure 3.11). An analysis of trends in black bean

exports to the ﬁve countries that accounted for signiﬁcant changes follows.

70

Figure 3.12 U.S. Black Bean Exports by Country, 1994-2003

Other countries _

8 Costa Rica
Haiti / 3%

2%

   

Guatemala
7%
Brazil

2% {2

Mexico
74%

Source: USITC (2005)
Increasing Exports of Black Beans to Mexico

During 1994-2003, the U.S. exported an average of 19,196 Mt (CV=59.2%)
of black beans per year to Mexico, ranging from a minimum of 3,412 Mt (1994) to a
maximum of 39,580 Mt (2003). Exports to Mexico, which accounted for most of the
increase in total black bean exports (47.7%), increased at an annual rate of 12.7%»
from 10,876 Mt (mean, 1994-1996) to 25,184 Mt (mean, 2001-2003). Consequently,
Mexico’s share of black exports grew by 28.6%, from 57.3% in 1994-1996 to 73.7%
in 2001-2003.
Increasing Exports of Black Beans to Guatemala

During 1994-2003, the U.S. exported an average of 1,741 Mt (CV=76.4%) of
black beans per year to Guatemala, ranging from a minimum of 225 Mt (1997) to a
maximum of 4,025 Mt (2002). Exports to Guatemala, which accounted for 27.2% of
the increase in total black bean exports, increased at an annual rate of 23.9%» from

723 Mt (mean, 1994-1996) to 3,243 Mt (mean, 2001-2003). Consequently,

71

Guatemala’s share of black bean exports grew by 50.2%, from 7.1% in 1994-1996 to
10.7% in 2001-2003.
Increasing Exports of Black Beans to Costa Rica

During 1994-2003, the U.S. exported an average of 859 Mt of black beans per
year to Costa Rica (CV=214.9%), ranging dramatically from zero in several years to a
maximtun of 5,965 Mt in 1998. Exports to Costa Rica, which accounted for 8.7% of
the increase in black bean exports, increased at an annual rate of 42.7%» from 57 Mt
(mean, 1994-1996) to 681 Mt (mean, 2001-2003). Consequently, Costa Rica’s share
of black exports grew from 0.2% in 1994-1996 to 2.5% in 2001-2003.
Declining Exports of Black Beans to Venezuela

During 1994-2003, the U.S. exported an average of 959 Mt (CV=145.3%) of
black beans per year to Venezuela, ranging from a minimum of zero Mt (2000) to a
maximum of 4,495 Mt (1995). Exports to Venezuela, which accounted for 48.0% of
the decrease in black bean exports, decreased at an annual rate of 19.7%» from 1,731
Mt (mean, 1994-1996) to 373 Mt (mean, 2001-2003). Consequently, Venezuela’s
share of black exports fell by 89% from 12.7% in 1994-1996 to 1.4% in 2001-2003.
Declining Exports of Black Beans to Brazil

During 1994-2003, the U.S. exported an average of 543 Mt (CV=125.1%) of
black beans per year to Brazil, ranging dramatically from a minimum of zero Mt after
1999 to a maximum of 1,912 Mt (1995). Exports to Brazil, which accounted for
33.0% of the decline in total black bean exports, decreased at an annual rate of

47.3%-- from 1,069 Mt (mean, 1994-1996) to 12 Mt (mean, 2001-2003).

72

Consequently, Brazil’s share of black exports decreased from 8.8% in 1994-1996 to
0.1% in 2001-2003
3.3 Summary of Export Trends

During 1994-2003, total U.S. exports of common beans decreased as a result
of a decrease in navy, pinto, kidney and “other common bean” exports. Navy bean
exports decline was mainly due to a decline in exports to the UK, Algeria, Bosnia,
and Italy. However, declining exports to the UK. were key in explaining the decline
in total navy bean exports, due to its initially large market share. The pinto bean
export decrease was mainly due to a decline in exports to Rwanda, Congo, and
Liberia, which highlights the importance of food aid for this market class’ decrease.
Finally, the United Kingdom and Italy accounted, for most of the decrease in kidney
bean exports. See Appendix IV for a numeric summary of export trends.

On the other hand, from 1994 to 2003, black and great northern bean exports
increased. Black bean export growth occurred in exports to Mexico, Guatemala, and
Costa Rica. However, Mexico accounted for most of the growth, due to its large
market share. Great northern bean export growth was mainly due to increased exports
to Iraq and Algeria, which highlights the role of food aid in this market classes’
growth.

United Kingdom and Mexico are key export markets for common beans.
During 1994-2003, United Kingdom accounted for 57.2% of navy bean exports, 7.1%
of kidney bean exports, and most of the decrease in these market classes. Therefore,
the UK. case is further analyzed to identify the reasons for declining exports to this

market. During the period, Mexico accounted for 74.1% of black bean exports, 37.2%

73

of kidney bean exports, and 7.1% of U.S. navy bean export growth. Mexico
accounted for most of the growth in U.S. black bean exports and contributed to U.S.
navy exports growth. Moreover, in January 2008, NAFTA will open the Mexican
market for the U.S. and Canada, countries that will compete for market shares.
Therefore, the Mexico case must be analyzed as a potential market for U.S. export
growth.
3.4 The Mexican Case

During 1994-2003, Mexico was the U.S.’s largest export partner, accounting
for 22.6% of total exports of common beans. At the market class level, Mexico
accounted for 74.1% of black, 37.2% of U.S. kidney, 30.9% of U.S. pinto, and 7.1%
of U.S. navy bean exports. Exports to Mexico, which accounted for most of the
increase (20.0%) in total common bean exports, increased at an annual rate of 2.6%--
from 59,943 Mt (mean, 1994-1996) to 71,889 Mt (mean, 2001-2003). At the market
‘class level, Mexico accounted for most of the growth in black bean exports and some
of the growth in navy bean exports, which shows Mexico’s potential as an export
market. During the decade, exports of black beans to Mexico increased by 14,308 Mt-
- from 10,876 Mt (mean, 1994-1996) to 25,184 Mt (mean, 2001-2003); while exports
of navy beans to Mexico increased by 3,959 Mt» from 5,280 Mt (mean, 1994-1996)

to 9,239 Mt (mean, 2001-2003) (Figure 3.13).

74

Figure 3.13 U.S. Bean Exports to Mexico by Selected Classes, 1994-2003

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

200
180
r: 160
2 140 I Other common beans
§ 120 _ CI Navy
5 100 El Pinto
g 80 I Kidney
3 60 I Black
40
20 -

 

 

Source: USITC (2005)

In January 2008, NAFTA will eliminate the quota system that currently
restricts Canadian exports to Mexico. This will generate intense competition between
Canada and the U.S. to capture Mexican market shares. Therefore, an analysis of
Mexican import demand» based on the analysis of production, exports, and import
trends» is needed to understand the potential to expand exports to Mexico. Due to
data availability, the analysis is made at the dry bean level, unless otherwise
indicated. However, almost all of the Mexican production of dry beans corresponds
to common bean market classes.

3.4.1 Production

During 1994-2003, Mexico produced an average of 1,216,921 Mt
(CV=17.5%) of dry beans per year, ranging from a minimum of 887,868 Mt (2000) to
a maximum of 1,549,090 Mt (2002). Common bean production increased slightly at

an annual rate of 0. 1%, from 1,328,084 Mt (mean, 1994-1996) to 1,337,406 Mt

75

(mean, 2001-2003). Production changes were associated with both acreage and yield
shifts, as shown in Figure 3.14.

Figure 3.14 Mexican Dry Bean Production, Yield, and Harvested Area, 1994-2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,600 2.400
1,400 /\= 4— 2.200
a M Production /
5 120° *ﬁ \\/ AR ///\ ~~ 2.000 ‘5’
1,000
g: \ V / — 1.800 5.
c 800 "'
a9 V1 \ / ~— 1.600 5
g 600 X f.
O.
200 -~ 1,200
- . . . - - . . . . 1,000
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
1,600 800
1,400 M k 750
Production /
g 1.200 /’°\\ A/r 700
§ 1.000 - —I\/A \. 650 i
: Mk / E
g 800 Y 600 v
g Yield 2
a 600 550 .2
t >-
E 400 500
200 450
- . a . . a . . . . 400

 

 

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: FAO, 2005

During 1990-2000, 84% of Mexico’s harvested bean area was cultivated
under rainfed conditions and only 16% was irrigated. Therefore, bean production in

Mexico varies, depending on the level of rains. Figure 3.15 shows a direct

76

relationship between bean production and annual precipitation in Mexico. Years of
low production, such as 1997, were associated with scarce rains.

Figure 3.15 Mexican Dry Bean Production and Annual Rainfall, 1994-2003

 

 

 

 

 

 

 

 

1.600 900
1,400 e [\e
M A Production / ‘” 85°
7:" 1,200
\ / \ / .. 800
§ 1.000 \ V E
g 800 V \ // \ 750 .5
a 600 12
a \ 4/ Rain T 700
o. 400 Y
~~ 650
200
' r r r 600

 

 

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: FAO (2004), CNA (2004).

During 1994-2003, the differences between planted and harvested area in
Mexico also indicated that the variability in bean production is mostly related to
weather conditions. Even though planted area ﬂuctuated from year-to-year, it was less
erratic than harvested area (Figure 3.16). Planted area showed a coefficient of
variation of 7.02%, while harvested area showed a coefficient of variation of 15.17%.
Thus, weather conditions had a greater effect on bean production than farmers’

planting decision.

77

Figure 3.16 Mexican Planted and Harvested Area for Beans, 1989-2004.

 

3.000
Area Planted

W

 

2,500

 

 

 

 

g 2,000 ' I
§ Area HanrestedV \
F 1,500 v
I
E 1.000

500

 

 

 

 

' I I I a r

1 994 1995 1996 1 997 1998 1999 2000
Source: Gonzales Ramirez (2003), FAO (2004).

There are no ofﬁcial statistics for Mexican bean production at the market class
level for the period 1994-2003. However, a study by FIRAl (2001) compiled data on
average production and consumption of “black” beans (e. g. the Mexican varieties
Jamapa, San Luis, Michigan, Nayarit, and Altiplano), “light” beans (e. g. Flor de
Mayo, Flor de Junio, Garbancillo, Azufrados, Canario, and Amarillo), and “pinto” .
beans (e. g. Pinto Americano, Pinto Nacional, and Ojo de Cabra) for the period 1993-
1999 (Table 3.2). The study concluded that from 1993 to 1999 there was a surplus of
“light” beans, and a large deﬁcit of “pinto” and “black” beans (Gonzales Ramirez,
2003). This explains U.S. exports of pinto and black beans to Mexico and the

importance of these market classes in Mexico’s total bean imports.

 

‘ FIRA-Banco de Mexico is a Mexican organization working on agricultural development. See
references.

78

Table 3.2 Annual Dry Bean Production, Consumption, and Balance in Mexico, 1993-

 

 

1999

Production Consumption Balance1
|| '02
B'ac" ”93"" 360,707 393.036 (32.329)
0. - 03
Light' beans 565,916 499,337 55,079
It - n4
“"10 beans 307,774 369.909 (62.135)

 

Source: Gonzales Ramirez (2003) with data from F IRA (2001).
3.4.2 Consumption

As ofﬁcial data are not available for bean consumption in Mexico, analysis of
apparent consumption5 is used in this section. During 1994-2003, apparent
consumption of beans averaged 1,295,689 Mt (CV= 16.5%) of beans per year, which
increased at an annual rate of 1.0%, from 1,335,615 Mt (mean, 1994-1996) to
1,432,643 Mt (mean, 2001-2003). The variability in apparent consumption was
mostly related to ﬂuctuations on bean domestic production, which was related to
weather conditions. Thus, real consumption can be considered essentially unchanged
since 1980» at 1.2 million Mt (Gonzalez Ramirez, 2003).

From 1994 to 2003, apparent consumption grew at a rate of 1.6% per year,
while Mexico’s population grew at an annual rate of 1.7%. Therefore, per capita
consumption of beans in Mexico declined slightly at a rate of 0.6% per year. The
decrease in per capita consumption was a result of change in consumer preferences
(e. g. towards easier-to-prepare foods), demographics (e. g. increasing urbanization

where bean consrunption is lower), and relative bean prices (e. g. as percentage of

 

' Balance = Production minus Consumption

2 Include the varieties Jamapa, San Luis, Michigan, Nayarit, and Altiplano

3 Include the varieties Flor de Mayo, Flor de Junio, Garbancillo, Azufrados, Canario, and Amarillo
’ Include the varieties Pinto Americano, Pinto Nacional, and Ojo de Cabra

5 “Apparent consumption” is computed as production plus imports minus exports.

79

income) (Gonzalez Ramirez, 2003). Thus, while per capita bean consumption has
declined, the population has increased» resulting in a constant consumption level of
around 1.2 million Mt per year.

Figure 3.17 Total and Per Capita Consumption for Dry Beans in Mexico, 1994-

 

 
   
   

 

 

2003.
1,800 25

a 1,600 - -_ 23
E Total .1 21 A
8 1.400 . consumption 5
o . 19 a
c 1,200 l o
g 1000 “r 17 2
Ii . . 15 2

O a
a 8 0 '1“ 13 g
5 50° 7 .- 11 3
2 400 L 3
‘3 Per capita ‘ 9 a.
"" 200 7 consumption »

' I f 5

 

1994 1995 1996 1997 19981999 2000 2001 2002 2003
Source: FAO (2004)

3.4.3 Exports

During 1994-2003, Mexican exports of beans were negligible, compared to
the size of the market; the country only exported an average of 2.0% of the domestic
production. Mexican bean exports were only considerably higher in 1994 and 1995,
when the country exported 7.32% and 6.52% of domestic production, respectively.
Over the decade, Mexican bean exports averaged 25,122 Mt (CV= 140.5%), ranging
from a minimum of 3,359 Mt in 2001 to a maximum of 99,870 Mt in 1994. From
1994 to 2003, Mexican bean exports decreased at an annual rate of 22.9%, from

63,919 Mt (mean, 1994-1996) to 10,326 Mt (mean, 2001-2003).

80

3.4.4 Imports

During 1994-2003, Mexico’s bean imports were equal to 8.5% of the
domestic production. Mexican bean imports averaged 103,889 Mt (CV= 45.9%),
ranging erratically from a minimum of 26,062 Mt in 1995 to a maximum of 202,005
Mt in 1998. Mexican bean imports increased at an annual rate of 5.7%» from 71,450
Mt (mean, 1994-1996) to 105,562 Mt (mean, 2001-2003).

Figure 3.18 Imports and Exports for Common Beans in Mexico, 1994-2003.

 

8’

 

§

 

 

200 A
Imports
150
Exports

50 -——“
\/\
v 3 AM

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: FAO (2004).

 

Trade (1000 Mt)

 

 

A _L
I v Y
r

 

 

 

3.4.4.1 Mexican Imports of Dry Beans by Country

Due to the importance of Mexico as a market for U.S. bean exports, an
analysis of Mexican imports by country of origin is required to identify competitor
countries in the Mexican market. During 1995-2003, U.S. accounted for 95.9% of
Mexican imports of common beans. This percentage was uniform over the period, as
indicated by a low coefﬁcient of variation (1.49%). Other countries that exported
beans to Mexico included Canada, Argentina, and China, but, their share of total

Mexican bean imports was negligible. Figure 3.19 shows that ﬂuctuations in U.S.

81

exports to Mexico were highly correlated with Mexico’s total bean imports. Thus, the
U.S.’s market share has remained constant over the past nine years.

Figure 3.19 Mexican Dry Bean Imports by Country, 1995-2003.

 

 

 

 

 

 

 

140
g 120 Total //b\\\
:5 100
g ,0 a / ”'S'\
E 60 / \‘1 XV
i \j
E :: 2/ Cafiragdearitigzina

 

 

 

1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: ALADI (2004).

3.4.5 Summary of Trends and Implications for U.S. Exports to Mexico

During 1994-2003, total bean consumption in Mexico remained steady, as a
result of the contraction in per capita consumption and population growth. Production
trended slightly upward, but showed great variability due to weather conditions.
Every year, Mexico needed to ﬁll the deﬁcit between production and consumption

through imports, which explained the high variability in imports from year-to-year.

82

Figure 3.20 Dry Bean Production, Consumptionl, Imports and Exports in Mexico,

1 994-2003

1 .800
1 .600
1 .400
1 .200
1 .000
800
600
400
200

1000 Mt

Production

Consumption

Imports

M

 

 

 

 

 

 

r r '11 v I ' l ' I ' r i r ' I V 1

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: FAO (2004)

During 1994-2003, the U.S. accounted for 95% of Mexican bean imports.

U.S. bean exports to Mexico were tied to Mexican shortfalls in production of beans,

which were, in turn, clearly tied to weather conditions. The U.S.’s share of total

Mexican bean imports remained unchanged at 95%. In other words, Mexico imported

almost all of the beans it needed to cover the difference between consumption and

domestic production from the U.S. Favorable weather increased production and

therefore, decreased U.S. exports of beans to Mexico. Figure 3.2] shows the negative

relationship between Mexican bean production and imports (imports correspond to

the quantity imported the following year)-- low output in a given year resulted in

large imports in the next year and vice versa.

 

' Estimated consumption

83

Figure 3.21 Mexican Dry Bean Production and Imports, 1989-2004

1 .600 350
1 .400

1 - a”

1,0, l/ \\/ Y\\/ 33::

800 X
600 \\ y . / X f 150
\

 

 

 

 

 

 

 

Production (1000 Mt)

A / _ Imports (year-1) _ 50

200 V \r

as“ .99? .99" (991.94” (o5? Nash" .99" .99“ as" (easis‘ poisons"
Source: FAO (2004).

400

 

Imports next year (1000 Mt)

 

 

 

3.5 The United Kingdom Case

During 1994-2003, the UK. was the U.S.’s second largest bean export
market, accounting for 16.3% of total exports of common beans. At the market class
level, the UK. accounted for 57.2% of navy and 7.1% of kidney bean exports.
However, the UK. accounted for most of the decrease (23.1%) in total U.S. common
bean exports. Exports to the UK. decreased at an annual rate of 7.9%—- from 65,844
Mt (mean, 1994-1996) to 36,751 Mt (mean, 2001-2003). At the market class level,
exports of navy beans to the UK. decreased by 22,212 Mt-- from 57,078 Mt (mean,
1994-1996) to 34,866 Mt (mean, 2001-2003); while exports of kidney beans to the
UK. decreased by 6,612 Mt-- from 7,871 Mt (mean, 1994-1996) to 1,259 Mt (mean,

2001-2003).

84

Figure 3.22 U.S. Dry Bean Exports to United Kingdom, Selected Classes, 1994-2003

 

100
90
80 J,
70 —4

60
50
40 J
30 .
20 «
1o

 

 

 

 

H:;_! I Other common beans
_—~—~ H I Kidney

 

1 L 1

1 l
1 Li.
illfllllm
l

 

uvvrv
......
.au.
.....

 

Exports (1000 Mt)

 

 

 

 

 

 

 

 

 

 

*v—fi w v71 17v Viv v v v v v v v
. . . . u . - t . . . . . . . .
. . . . . . . . . .

 

 

”1.4.4.. T

 

 

 

 

P——‘
. - u . .
.. ... .l.
. . . .
.
. .

 

 

 

’\ '\

Source: USITC (2005)

Thus, in order to understand the decrease in common bean exports to the
U.K., an analysis of the U.K.’s import demand is needed. The UK. imports almost all
of its common beans since its domestic production is negligible. Due to data
availability, this analysis is made for kidney and white pea (navy) beans—the two .
market classes which account for almost all imports.
3.5.1 Imports

During 1994-2003, the UK. imported an average of 106,345 Mt (CV= 6.7%)
of kidney and navy (white pea) beans, ranging from a minimum of 96,356 Mt in 2003
to a maximum of 120,093 Mt in 1996. The U.K.’s kidney and navy bean imports
decreased at an annual rate of 1.5%-- from 110,146 Mt (mean, 1994-1996) to 98,865

Mt (mean, 2001-2003).

85

Figure 3.23 United Kingdom’s Navy and Kidney Bean Imports, 1994-2003.

 

 

 

 

 

 

 

140
120 j“
g 100 k,
0
§ 80
E 60
O
n.
g 40
20

 

 

 

1994 1199511996 11997 ‘1998 1999 200012001’2002'2003
Source: United Nations Statistics Division (2005).
3.5.1.] United Kingdom’s Imports of Common Beans by Country
Due to the importance of UK. as a market for U.S. bean exports and the
erosion of U.S. exports to this country, an analysis of U.K.’s imports by country of
origin is required to identify competitor countries and changes in their market shares.
During 1994-2003, the U.S. accounted for an average of 38.9% (CV= 68.4%)
of the U.K.’s imports of common beans. However, this percentage decreased sharply-
- from 61.5% (mean, 1994-1996) to 12.5% (mean, 2001-2003). Other countries that
exported to the UK. included Canada, China, and Argentina. However, only Canada
has accounted for a signiﬁcant share of total common bean imports-- an average of
57.0% (CV= 46.3%) of UK. imports of common beans. However, this percentage
increased sharply over the period-- from 34.6% (mean, 1994-1996) to 82.2% (mean,
2001-2003). Figure 3.24 shows that the U.S.’s decline in exports to the United

Kingdom’s was linked to grth in Canadian exports. Thus, growth in Canada’s

86

market share explained almost all the decline in U.S. common bean exports to the

UK.

Figure 3.24 U.K. Imports from Selected Countries, 1994-2003.

 

 

 

 

 

 

 

 

140
Total
120 M
3 100 x. ,
E U.S.
g 60
a Canada
g 40 /k V \
20 H _,
Other countries m—

 

 

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: United Nations Statistics Division (2005).
3.5.2 Summary of Trends and Implications for U.S. Exports to the United
Kingdom
During 1994-2003, while the United Kingdom’s kidney and navy bean imports
decreased slightly, there was a signiﬁcant change in the country of origin. U.S. navy
and kidney bean exports to the UK. decreased at an annual rate of 21 .5%, from
67,834 Mt (mean, 1994-1996) to 12,460 Mt (mean, 2001-2003). On the other hand,
Canadian common bean exports to the United Kingdom increased at an annual rate of
11.4%-- from 38,078 Mt (mean, 1994-1996) to 81,177 Mt (mean, 2001-2003). This
market share shift (from the U.S. to Canada) explains the decrease in U.S. common
bean exports to the UK. Most of the decrease in U.S. common bean exports to the

UK. occurred in navy (22,212 Mt) and kidney beans (6,612 Mt).

87

CHAPTER FOUR

IMPORT TRENDS BY MARKET CLASS AND COMMERCIAL PARTNER

4.1 Overview
During 1994-2003, U.S. common bean imports were equivalent to only 6.1%

of domestic production, averaging 71,070 Mt (CV= 66.9%). However, from 1994 to
2003 common bean imports increased sharply at an annual rate of 21 .2%-- from
35,341 Mt (mean, 1994-1996) to 135,790 Mt (mean, 2001-2003). Even though
imports of all the market classes increased, black, navy, and “nesoi” beans’ grth
rates were the highest. Therefore, these market classes accounted for most of the
growth in total common bean imports.

Figure 4.1 U.S. Common Bean Imports by Market Class‘, 1994-2003

 

 

 

 

 

 

 

 

 

180

160
A 140 D Other
’2' Kidne
o 120 y
8 100 a Great Northern
5 80 [3 Pinto
1? a Nesoi
g 60 - Navy
.5. 4o

. El Black
20 « ‘-

 

 

 

 

Source: USITC (2005)

 

' Nesoi refers to common beans that were not classiﬁed as a speciﬁc market class at the port of entry.
Thus, this category may include some imports of all market classes.

88

Shift-sharel analysis indicated that three market classes accounted for the
increase in common bean imports; black beans (81.5%), navy beans (16.2%), and
“nesoi” beans (2.3%). On the other hand, pinto beans (37.9%), kidney beans (35.6%),
and “other” common beans (26.1%) accounted for the decline in common bean
imports. It is necessary to point out that from 1994 to 2003 imports of all the market
classes together increased 100,449 Mt. However, as discussed in Chapter Two, shift-
share analysis relates negative growth with growth rates under the average.

Table 4.1 U.S. Common Bean Imports by Market Class, 1994-2003

 

Mean Mean Absolute

 

Market Class 1994-1996 2001-2003 change '23:: 339 Growth
(Mt) (Mt) (Mt) rate

Pinto beans 4,295 10,886 6,591 153.46% -37.90% 14.21%
Navy beans 3,032 14,057 11,025 363.55% 16.23% 24.50%
Great Northern 128 440 312 243.49% -0.35% 19.28%
Kidney beans 6,794 20,822 14,028 206.48% -35.64% 17.35%
Black beans 1,162 16,543 15,381 1323.45% 81.50% 46.14%
Other common 2.772 6,782 4,010 144.66% -26.11% 13.63%
Nesoi beans 17,157 66,260 49,103 286.19% 2.27% 21.29%
Total 35,341 135,790 100,449 284.23% 0.00% 21.20%

 

Source: USITC (2005)

As a result of the mentioned changes, from 1994 to 2003 black, navy, and
“nesoi” beans grew in relative importance (their share of total U.S. common bean
imports). On the other hand, pinto, kidney, and “other” common beans decreased in

relative importance (Figure 4.2).

 

' In Chapter Four, shift-share analysis was conducted for import data to identify the market classes that
were truly responsible for the increase in U.S. imports. At the market class level, trade data was
analyzed with the shift-share method to identify the trade partners truly responsible for the growth of
the market classes. Shift-share analysis overcomes over and underestimation problems, which can lead
to spurious results in trade analysis due to the variability of shares among trade partners as percentage
of totally quantity traded.

89

Figure 4.2 U.S. Common Bean Imports by Market Class, 1994-2003

1 994-1 996

Other Pinto beans
8% 12%

  
  
  

Navy beans
9%

49% 5 : Kidney beans
19%

Black beans
3%

2001-2003
Other Pinto beans

5% 8%

  
  

 

Navy beans
10%

Nesoi bean

‘7
50 o : Kidney beans

15%

Black beans
12%

Source: USITC (2005)
4.2 Common Bean Imports by Market Class
4.2.1 Pinto Beans

During 1994-2003, the U.S. imported an average of 7,695 Mt (CV=53.7%) of
pinto beans per year, ranging from a minimum of 3,116 Mt (1994) to a maximum of
18,120 Mt (2001). During the period, pinto bean imports increased at an annual rate
of 14.2%-- from 4,295 Mt per year (mean, 1994-1996) to 10,886 Mt per year (mean

2001-2003).

90

However, shift-share analysis indicated that Canada alone accounted for
89.6% of the increase and Mexico accounted for 96.3% of the decrease in U.S. pinto
bean imports. During the period, Canada accounted for 91.5% of U.S. pinto bean
imports, while Mexico accounted for a small share of total imports (Figure 4.3).

Figure 4.3 U.S. Pinto Bean Imports by Country, 1994-2003

20
18
16
14
12
10

I Other countries
0 Mexico
El Canada

Imports (1000 Mt)

10me

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: USITC (2005)
Imports of Pinto Beans from Canada

Pinto beans imports from Canada show a consistent upward trend. During
1994-2003, the U.S. imported an average of 7,041 Mt (CV= 64.8%) of pinto beans
per year from Canada, ranging from a minimum of 1,193 Mt in 1994 to a maximum
of 17,906 Mt in 2001. U.S. pinto bean imports from Canada increased at an annual
rate of 19.2%-- from 2,990 Mt (mean, 1994-1996) to 10,207 Mt (mean, 2001-2003).
Consequently, Canada’s share of U.S. pinto imports grew from 69.6% in 1994-1996

to 93.8% in 2001-2003.

91

Imports of Pinto Beans from Mexico

During 1994-2003, the U.S. imported an average of 407 Mt (CV=195.6%) of
pinto beans per year from Mexico, ranging from a minimum of 13 Mt (2001) to a
maximum of 2,625 Mt (1994). Imports from Mexico, which accounted for 5.3% of
total imports of pinto beans and for 96.3% of the decrease in pinto bean imports,
decreased at an annual rate of 35.7%-- from 1,135 Mt (mean, 1994-1996) to 51 Mt
(mean, 2001-2003). Consequently, Mexico’s share of pinto imports fell from 26.4%
in 1994-1996 to 0.5% in 2001-2003.

4.2.2 Navy Beans

During 1994-2003, the U.S. imported an average of 7,21 8 Mt (CV=80.1%) of
navy beans per year, ranging from a minimum of 1,238 Mt (1994) to a maximum of
16,710 Mt (2002). Navy beans, which accounted for 16.2% of the increase in total
common bean imports, increased at an annual rate of 24.5%-- from 3,032 Mt per year
(mean, 1994-1996) to 14,057 Mt per year (mean 2001-2003).

Canada accounted for 98.4% of navy bean imports and increased at an annual
rate of 24.5%. Shift-share analysis indicated that all of this growth in imports was due
to increased imports from Ethiopia, China, and El Salvador. However, these countries
accounted for a negligible share of total imports (0.7%, 0.2%, and 0.03%
respectively).Therefore, only further analysis of trends in navy bean imports from

Canada is needed to understand recent import trends.

92

Figure 4.4 U.S. Navy Bean Imports by Country, 1994-2003

 

18
16
14
12
10

 

 

 

I Other countries
13 Canada

 

 

 

Imports (1 000 Mt)

 

 

 

 

 

- f

‘ 1994 1995 19196 1997 19198 1999 20100 20101 20102 2003

Source: USITC (2005)
Imports of Navy Beans from Canada

Navy beans imports from Canada show an upward trend. During 1994-2003,
the U.S. imported an average of 7,101 Mt (CV=79.9%) of navy beans per year from
Canada, ranging from a minimum of 1,165 Mt in 1994 to a maximum of 16,163 Mt in
2002. Navy bean imports from Canada increased at an annual rate of 24.4%» from
2,995 Mt (mean, 1994-1996) to 13,788 Mt (mean, 2001-2003). Consequently,
Canada’s share of navy imports increased from 97.8% in 1994-1996 to 98.2% in
2001-2003.
4.2.3 Kidney Beans

During 1994-2003, the U.S. imported an average of 10,785 Mt (CV=74.0%)
of kidney beans per year, ranging from a minimum of 4,381 Mt (1998) to a maximum
of 26,391 Mt (2002). Kidney bean imports increased at an annual rate of l7.4%--from

6,794 Mt per year (mean, 1994-1996) to 20,822 Mt per year (mean 2001-2003).

93

Figure 4.5 U.S. Kidney Bean Imports by Country, 1994-2003

 

 

 

 

 

30
25
‘5" 20 CI Other countries
O .
8 I Chrna
t. 15 E] El Salvador
g I Mexico
g 10
E a Canada

 

 

 

" I 7 I I I I I

1994 19195 19196 1997 1998 1999 2000 2001 2002 2003
Source: USITC (2005)

Mexico, El Salvador, Canada, and China accounted for over 82% of total
kidney bean imports. Canada alone accounted for 56.7% of total kidney bean imports
(Figure 4.6). However, shift-share analysis indicated that two countries accounted for
over 80% of the increase in U.S. kidney bean imports; Mexico (69.8%), and El
Salvador (10.3%). On the other hand, Canadal (49.3%), and China (36.4%) accounted
for most of the decrease in kidney bean imports. An analysis of trends in kidney bean

imports for the four countries that accounted for signiﬁcant changes follows.

 

’ Although, Canada accounted for an absolute increase of 6,817 Mt, this country has a negative shift
share result since its imports grew at a slower rate than total kidney imports (Figure 4.5).

94

Figure 4.6 Origin of U.S. Kidney Bean Imports, 1994-2003

Other countries
8% '\ Mexico

  

9%

Canada 7%
57%

Source: USITC (2005)
Increasing Imports of Kidney Beans from Mexico

During 1994-2003, the U.S. imported an average of 2,072 Mt (CV=131.7%)
of kidney beans per year from Mexico, ranging from a minimum of 1 19 Mt in 1994 to
a maximum of 7,292 Mt in 2002. Kidney bean imports from Mexico increased at an
annual rate of 44.8%-- from 383 Mt (mean, 1994-1996) to 5,107 Mt (mean, 2001-
2003). Consequently, Mexico’s share of kidney imports grew from 5.6% in 1994-
1996 to 24.5% in 2001-2003.
Increasing Imports of Kidney Beans from El Salvador

During 1994-2003, the U.S. imported an average of 940 Mt (CV= 60.5%) of
kidney beans per year from El Salvador, ranging from a minimum of 303 Mt in 1994
to a maximum of 1,891 Mt in 2001. Kidney bean imports from El Salvador increased
at an annual rate of 25.1%-- from 337 Mt (mean, 1994-1996) to 1,614 Mt (mean,
2001-2003). Consequently, El Salvador’s share of kidney imports grew from 5.0% in

1994-1996 to 7.8% in 2001-2003.

95

Increasing Imports of Kidney Beans from Canada

During 1994-2003, U.S. imported an average of 6,1 13 Mt (CV=68.0%) of
kidney beans per year from Canada, ranging from a minimum of 2,300 Mt in 1998 to
a maximum of 14,053 Mt in 2002. Kidney bean imports from Canada increased at an
annual rate of 13.8%-- from 4,647 Mt (mean, 1994-1996) to 11,464 Mt (mean, 2001-
2003). As kidney imports ﬁ‘om Canada grew slower than total kidney imports,
Canada’s share of kidney imports decreased from 68.4% in 1994-1996 to 55.1% in
2001-2003.
Decreasing Imports of Kidney Beans from China

During 1994-2003, the U.S. imported an average of 751 Mt (CV= 74.8%) of
kidney beans per year from China, ranging from a minimum of 148 Mt in 1997 to a
maximum of 1,845 Mt in 2002. Kidney bean imports from China decreased slightly at
an annual rate of 0.4% from 979 Mt (mean, 1994-1996) to 949 Mt (mean, 2001-
2003). Consequently, China’s share of kidney imports decreased from 14.4% in 1994-
1996 to 4.6% in 2001-2003. '
4.2.4 Great Northern Beans

U.S. imports of great northern beans were negligible and ﬂuctuated
erratically. During 1994-2003, the U.S. imported an average of 326 Mt (CV=
117.2%) of great northern beans per year, ranging from a minimum of 20 Mt (2000)
to a maximrun of 1,122 Mt (1997). Great northern beans imports increased at an
annual rate of 19.3%-- from 128 Mt per year (mean, 1994-1996) to 440 Mt per year

(mean 2001-2003).

96

Canada and China accounted for over 67% of total U.S. kidney bean imports
(Figure 4.8). While Mexico accounted for 27.6% of total kidney bean imports, this
country did not account for any signiﬁcant change due to the concentration of imports
from Mexico in the period 1997-1999. Shift share analysis indicated that Canada
accounted for 98.1% of the increase while China accounts for most (46.1%) of the
decrease in great northern bean imports (Figure 4.7). An analysis of trends in great
northern bean imports from Canada and China follows.

Figure 4.7 U.S. Great Northern Bean Imports by Country, 1994-2003

 

 

 

 

 

 

 

 

 

 

L200
L000
a 800
E .~ I Other countries
g 600 :33} IChina
g 3:}: DCanada
— 400 {3:3
223331
200 ’ '

 

 

 

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: USITC (2005)

97

Figure 4.8 U.S. Great Northern Bean Imports by Country of Origin, 1994-2003

Other countries
5%

China

Mexico_ it:
23%

 

Source: USITC (2005)
Increasing Imports of Great Northern Beans from Canada

During 1994-2003, great northern bean imports from Canada averaged 190 Mt
(CV= 153.8%), ﬂuctuating erratically from no imports in 1995, 1998, and 1999 to a
maximum of 871 Mt in 2003. Great northern bean imports from Canada increased at
an annual rate of 42.5%-- from 35 Mt (mean, 1994-1996) to 411 Mt (mean, 2001-
2003). Consequently, Canada’s share of great northern imports increased from 27.0%
in 1994-1996 to 93.5% in 2001-2003.
Decreasing Imports of Great Northern Beans from China

During 1994-2003, great northern bean imports from China averaged 28 Mt
(CV= 133.8%), ﬂuctuating erratically from no imports in 1994, 2000, and 2001 to a
maximum of 119 Mt in 1996. Great northern bean imports from China decreased at
an annual rate of 10.1%—- from 46 Mt (mean, 1994-1996) to 22 Mt (mean, 2001-
2003). Consequently, China’s share of great northern imports decreased from 36.3%

in 1994-1996 to 5.0% in 2001-2003.

98

4.2.5 Black Beans

During 1994-2003, the U.S. imported an average of 6,456 Mt (CV=136.7%)
of black beans per year, ranging from a minimum of 781 Mt (1994) to a maximum of
29,493 Mt (2002). Imports of black beans, which accounted for 81.5% of the increase
in total U.S. common bean imports, increased at an annual rate of 46.1%-- from 1,162
Mt per year (mean, 1994-1996) to 16,543 Mt per year (mean 2001-2003).

Figure 4.9 U.S. Black Bean Imports by Country of Origin, 1994-2003

 

 

 

 

 

 

 

35

30 /\
g 25 '
8 33%, D Other countries
2 20 5- a Argentina
é ‘5 I China
a 13 Canada
E 10

5

 

 

 

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: USITC (2005)

Canada, China, and Argentina accounted for 81% of total black bean imports.
Canada alone accounted for 37.5% of total black bean imports, which increased
steadily since 1997 (Figure 4.10). However, imports from China and Argentina were
concentrated in the last years of the period (2000 to 2003). Shift-share analysis
indicated that three countries accounted for over 93% of the growth in black bean
imports; China (43.3%), Argentina (35.0%), and Canada (15.3%) (Figure 4.9). An

analysis of trends in black bean imports from these three countries follows.

99

Figure 4.10 Origin of U.S. Black Bean Imports, 1994-2003

Other countries
1 5%

   

China

Mexico__ 32%

2%

Canada 12%

Source: USITC (2005)
Increasing Imports of Black Beans from China

During 1994-2003, the U.S. imported an average 311 Mt (CV=39.4%) of
black beans from China, ranging from a minimum of 202 Mt in 1994 to a maximum
of 11,406 Mt in 2002. Imports from China, which accounted for 32.4% of the imports
of black beans and for most (43.3%) of the increase in total black bean imports,
increased at an annual rate of 60.6%-- from 226 Mt (mean, 1994-1996) to 6,245 Mt
(mean, 2001-2003). Consequently, China’s share of U.S. black bean imports grew by
76.6%, from 20.5% in 1994-1996 to 36.3% in 2001-2003.1
Erratic Imports of Black Beans from Argentina

During 1994-2005, the U.S. imported an average of 763 Mt (CV=280.3%) of
black beans from Argentina, ranging from a minimum of zero to a maximum of 6,847

Mt in 2002. Argentina accounted for 11.8% of the total imports of black beans and

 

1 During 1994-2000, U.S. imported a steady average of 3 l 1 Mt of black beans per year from China
(CV=39.4%). However, imports from China grew dramatically aﬁer 2000.

100

for 35.0% of the increase in total black bean imports. However, excluding 2002
eliminates the importance of Argentina as U.S. black bean supplier.
Increasing Imports of Black Beans from Canada

Canada is the only black bean supplier that showed an upward import trend.
During 1994-2003, the U.S. imported an average of 2,423 Mt (CV=98.8%) of black
beans per year from Canada, ranging from a minimum of 201 Mt in 1994 to a
maximum of 6,563 Mt in 2002. Imports from Canada, which accounted for most of
the imports of black beans (3 7.5%) and for 15.3% of the increase in black bean
imports, increased at an annual rate of 50.7%-- from 312 Mt (mean, 1994-1996) to
5,515 Mt (mean, 2001-2003). Consequently, Canada’s share of black imports grew by
57.6% from 26.2% in 1994-1996 to 41.3% in 2001-2003.
Decreasing Imports of Black Beans from Mexico

During 1994-2003, the U.S. imported an average of 153 Mt (CV=77.9%) of
black beans per year from Mexico, ranging from a minimum of 8 Mt (2002) to a
maximum of 375 Mt (1998). Imports from Mexico, which accounted for 2.4% of
imports of black beans and for 29.3% of the decline in black bean imports, decreased
at an annual rate of 14.1%-- from 147 Mt (mean, 1994-1996) to 51 Mt (mean, 2001-
2003). Mexico’s share of black imports fell from 12.7% in 1994-1996 to 0.3% in
2001-2003.
Decreasing Imports of Black Beans from Guatemala

During 1994-2003, the U.S. imported an average of 32 Mt (CV=176.7%) of
black beans per year from Guatemala. Imports from Guatemala, which accounted for

0.5% of imports of black beans and for 18.9% of the decline in black bean imports,

101

decreased at an annual rate of 36.0% from 93 Mt (mean, 1994-1996) to 4 Mt (mean,
2001-2003). Consequently, Guatemala’s share of black imports decreased from 6.9%
in 1994-1996 to 0.04% in 2001-2003.

4.2.6 Summary of Import Trends

During 1994-2003, U.S. imports of common beans increased as a result of
increase in all the market classes; navy, pinto, kidney, great northern, black, “nesoi”,
and “other” common beans. Black, navy, and “nesoi” bean imports increased at
higher rates than total imports, while pinto, kidney, and “other” bean imports
increased more slowly than the average. While great northern bean imports also
increased they were still negligible.

Pinto bean import growth was mainly associated with increased imports from
Canada, which also accounted for most of the increase in navy and great northern
bean imports.

Kidney bean import growth was driven by increased imports from Mexico, El
Salvador, and Canada. However, imports from Mexico and El Salvador account for a
small share of the market, which leaves Canada as the key country in this market.

Black bean import growth was driven by increased imports from China,
Argentina, and Canada. However, imports from China and Argentina occurred only in
the last years of the period. On the other hand, imports from Canada are primarily
responsible for the increase in black bean imports due to its large market share and
steadily increasing imports. In addition, Canada is the country that has taken away
international market shares that previously belonged to the US, especially in

important markets such as the United Kingdom, as shown in Chapter Three.

102

Therefore, further analysis of Canadian export supply is needed to understand its
increasing competitiveness with the U.S.
4.3 The Canadian Case

During 1994-2003, Canada was the largest source of bean imports--
accounting for 98.4% of navy, 91.5% of pinto, 56.7% of kidney, 37.5% of black, and
80.5% of “nesoi”l bean imports. Canada also accounted for most of the growth in
total common bean imports. Imports of common beans from Canada, which increased
by 74,131 Mt from 23,476 Mt (mean, 1994-1996) to 97,607 Mt (mean, 2001-2003),
were distributed (i.e. share of increase) among navy (10,793 Mt), kidney (6,817 Mt),
pinto (7,217 Mt), black (5,203 Mt), and “nesoi” beans (43,724 Mt) (Figure 4.11).

Figure 4.11 U.S. Bean Imports from Canada, Selected Classes, 1994-2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

120

1 00
E 30 I H I P1010
8 D Nesoi
S 60 [3 Navy
‘3 I Kidney
° 40
g I Black

20

 

 

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: USITC (2005)

Furthermore, Canada has become a strong competitor in international markets.

As shown in Chapter Three, Canada has captured 82.2% (mean, 2001-2003) of the

 

' NESOI codes correspond to beans that are not otherwise classiﬁed. In other words, NESOI beans are
beans for which a code is not speciﬁcally designed.

103

UK. market, which was formerly dominated by the U.S. Moreover, the U.S. bean
industry is concerned about the potential of the Canadian bean industry to capture
Mexican market shares aﬁer January 2008, when NAFTA rules will eliminate the
quota on Canadian exports to Mexico. An assessment of Canadian export potential
based on an analysis of production, exports, and production cost trends follows. Due
to data availability, the analysis covers the 1994-2002 period at the dry bean level,
unless otherwise indicated.
4.3.1 Production

During 1994-2002, Canada produced an average of 23 7,1 1 1 Mt (CV=37.5%)
of dry beans per year, ranging from a minimum of 133,000 Mt (1996) to a maximum
of 414,000 Mt (2002). Dry bean production increased at an annual rate of 11.6%--
from 169,000 Mt (mean, 1994-1996) to 326,667 Mt (mean, 2001-2003), which was
associated with acreage increase rather than yield improvements (Figure 4.12).

Figure 4.12 Canadian Bean Production, Yield, and Harvested Area, 1994-2002

 

 

 

 

 

 

 

 

 

450 300
400 1’
A 350 .- 250
‘5‘ a
§ 300 // 200 5
Production N §
5 250 ..
c / r 150 v
,3 200 - . g
3 150 9 / Area “amt“ 100 ‘3
W 2
3 100 50 <
50
o - L o

 

 

 

1994 1995 1996 1997 1998 1999 2000 2001 2002

104

450 3

400 ’ 2.8

35° // -- 2.6

:2: Production M " 2-4

200 . - / JP 2'2
150 A “ 2

v/ ‘\ / +1.8

v Yield\/ 4_ 1.6

0 . . . . . . . L 1,4
1994 1995 1996 1997 1998 1999 2000 2001 2002

 

 

 

 

 

Yield (MtIHa)

 

Production (1000 Mt)

é

 

01
O

 

 

 

 

Source: Agriculture and Agri-Food Canada, 2003.

During 1999-2001', navy beans accounted for 42.7% of Canada’s common
bean production, which increased by 84.6% over the three year period-— from 65,000
Mt (1999) to 120,000 Mt (2001) as shown in ﬁgure 4.13. Pinto beans accounted for
19.1% of total common bean production, which increased by 76.3% from 38,000 Mt
(1999) to 42,000 Mt (2001). Other market classes produced in Canada included
cranberry (8.2% of total common bean production), black (7.8%), great northern
(5.2%), small red (5.3%), dark red kidney (4.6%), light red kidney (2.9%), and pink
beans (1.6%). In general, production of all market classes has increased, with some
ﬂuctuations in response to prices (Agriculture and Agri-Food Canada, 2000).

Dry beans are mainly produced in Ontario and Manitoba While production
increased in all bean-producing provinces, Manitoba shows the largest increase. For
example, Manitoba’s share of total dry bean production increased from 43.1% in
1998 to 56.6% in 2002 (Agriculture and Agri-Food Canada, 2000; Manitoba

Agriculture Food and Rural Initiatives, 2005). Due to the importance of Manitoba in

 

' Production data at the market class level is only available for 1999 to 2001 (Figure 4.13).

105

Canadian bean sector growth, an analysis of the main trends in this province’s bean
sector and factors determining its growth is included later in this chapter.

Figure 4.13 Bean Production by Market Class in Canada, 1999-2001

 

Other
Pink
LR Kidney
DR Kidney
1“ Small Red
Great Northern

- Black
_ Cranbeny

   
 
   
 
  

2001

  
   
    
  
  

Navy

 

Other

Pink

- LR Kidney

DR Kidney
:R Small Red

2000 Great Northern

_ Black

- Cranberry

-" ~~=wwmriwm ., .. , ,1 . .
. .. ‘ “ ~ 7‘ 'r. . "" ' _, ‘ " _
~ . . r: . Navy
, ’ _~, . . .‘ . . ,‘r

J. :ﬂr

  
    
  
  
  
 

Other
Pink
l LR Kidney

DR Kidney
:‘ Small Red
Great Northern
Black
Cranbeny

  

1999

 

 

  

 

 

0 20 40 60 80 100 120 140 160
1000 Mt

Source: Agriculture and Agri-Food Canada, 2001

106

4.3.2 Exports

Canada exports around 80% of its domestic production, which makes the
Canadian bean industry far more dependant on exports than their counterparts in other
countries. Canadian exports consist mostly of unprocessed beans (Agriculture and
Agri-Food Canada, 2004). During 1994-2002, Canada exported an average of
188,033 Mt (CV=30.6%) of dry beans per year, ranging from a minimmn of 123,300
Mt (1994) to a maximum of 277,600 Mt (2002). Canadian dry bean exports increased
at an annual rate of 10.9%-- from 135,500 Mt (mean, 1994-1996) to 252,833 Mt
(mean, 2001-2003).

’ During 1994-2003, the U.S. and the UK. were Canada’s main export markets,
accounting for 25.4% and 23.3% of total Canadian dry bean exports, respectively.
Other important export destinations included Italy (8.7% of total exports), Spain
(4.0%), and the Dominican Republic (1.7%).

During 1994-2003, Canadian bean exports to the U.S. grew at an annual rate
of 22.7%, increasing the U.S.’s share of total Canadian exports from 16.7% (mean,
1994-1996) to 36.3% (mean, 2001-2003). Canadian bean exports to the UK. (mainly
navy beans) grew at an annual rate of 2.8%, decreasing the U.K.’s share of total
Canadian exports from 30.6% (mean, 1994-1996) to 19.4% (mean, 2001-2003) (see
Figure 4.14). F urtherrnore, Canadian exports to all of its other major markets have

also increased.

107

Figure 4.14 Canadian Dry Bean Exports, 1994-2003

 

 

 

 

 

 

 

 

 

 

 

160

140 *rik-e
“.7." 120 //
:> World
5 10° JK/////b“*‘n&'
; 30
v M United States
‘2 60 is
8. ,,/’//.\\\“e
a 40 U 'ted K'ngdom 2% r

nr 1
20 - V
. : . + + M. ' ﬁaly '

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: Statistics Canada, 2005
4.3.3 Manitoba

During the period 2001-2003 Manitoba produced an average of 186,060 Mt
(CV=21.3%) of dry beans. Most of Manitoba bean production corresponded to navy
beans, market class with an average production of 95,909 Mt (CV=26.4%). Manitoba
also produced 90,151 Mt (CV=16.0%) of colored beans including pinto, black,
kidney, red Mexican, cranberry, and other beans.

During the period 1994-2003, Canadian dry (navy and colored) bean acreage
averaged 159,000 acres (CV=63.5%) per year, ranging from a minimum of 45,000
acres (1994) to a maximum of 315,000 acres (2002). Over this period, dry bean
acreage increased at an annual rate of 23.8%, from 58,333 acres (mean, 1994-1996)

to 260,000 acres (mean, 2001-2003) (Statistics Canada, 2005).

108

Figure 4.15 Bean Acreage in Manitoba, 1994-2003

400
350
300
250
200

Production

150

Production (1000 Mt)

1 00
50

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: Statistics Canada (2005)

In 2003, dry bean acreage in Manitoba reached 220,000 acres divided among
navy beans (41.5% of total acreage), pinto (33.0%), black (7.6%), kidney (5.8%), red
Mexican (3.1%), cranberry (1.8%), and other beans (7.1%) (Manitoba Agriculture,
Food and Rural Initiatives, 2005).

Figure 4.16 Bean acreage in Manitoba by market class, 2003

emf... a...
RedMexican 24’ /‘ 7%
3% /
Kidney
6%
Black
8%

      

Pinto
33%

Source: Manitoba Agriculture, Food and Rural Initiatives, 2005

109

Bean yield in Manitoba has been high and steady, compared with other bean
producing regions. During the period 2001-2003, navy bean yield in Manitoba
averaged 1,580 pounds/acre (CV=7.9%), while Michigan navy bean yield averaged
1,353 pounds/acre (CV=52.0%). Michigan is used in the comparison as the most

relevant U.S. navy bean producer.

Figure 4.17 Navy Bean Yield in Manitoba and Michigan, 2001-2003

 

2500

 

2000 __

 

 

 

l_‘ :;:;: :;:;:; E] Michigan

0 Manitoba

 

 

 

 

 

Yield (lb/acre)

1000 335;} 35333; .4

 

 

5004

 

 

 

 

 

 

 

 

 

 

 

 

2001 2002 I 2003
Source: Manitoba Agriculture, Food and Rural Initiatives, 2005

In the pinto bean case, yield in Manitoba1 averaged 1,630 pounds/acre
(CV=3.4%), while North Dakota pinto bean yield averaged 1,530 pounds/acre

(CV=2.8%). North Dakota is used in the comparison as the main U.S. pinto bean

producer.

 

' In the comparison, data for Manitoba corresponds to colored bean yields. Colored bean information is
representative of pinto beans as pinto beans account for 55.9% of colored bean production.

110

Figure 4.18 Pinto Bean Yield in Manitoba and Michigan, 2001-2003

 

2500

 

2000

 

 

1500 _ 121:1 7'7: —— _ .
313:} 313:}: DMrchrgan

CI Manitoba

 

 

 

 

 

 

 

1000 3233 §2§z§s 4

Yield (lblacre)

 

5001

 

 

 

 

 

 

 

 

 

 

 

 

 

' aoo1 ' .002 '2...
Source: Manitoba Agriculture, Food and Rural Initiatives, 2005

As a result of bean production growth, Manitoba bean exports reached an
average of U.S.S 48.3 million (CV=11.8%) in’2001-2003. In the same period,
Manitoba imported an average of U.S.$ 2.0 million (CV=25.6%), mainly from the
U.S., primarily for planting seed.

Even though, bean production in Manitoba started in the mid-19605,
signiﬁcant increase occurred in the mid-19905. Bean production growth in Manitoba
is related to several factors that are explored in this section.

Climate change

There is scientiﬁc consensus on the reality and effects that climate change will
bring to Canada due to its geographical position. Climate projections for the Prairies
anticipate increased temperatures as a consequence of global warming. Studies
suggest that summer temperature in Manitoba could increase by 3 to 4 °C, while
winter temperatures by 5 to 8 °C. Increased frost-free days are also expected in

Manitoba, which will greatly impact agriculture in the province. Longer frost-free

111

periods will result on a longer growing season, which increases the range of
cultivable crops. On the other hand, Manitoba might experiment summer precipitation
decrease, which will increase irrigation needs. Climate change might also increase
risk of heat stress and warmer winters might result on less winter kill of weeds and
insects increasing pest incidence (Government of Canada, 2005).

Dry bean production has speciﬁc soil, moisture, and temperature requirements
to reach full maturity. Manitoba offers excellent to adequate soil and moisture
conditions, which makes dry bean production feasible on virtually any region in
Manitoba. The optimum temperature for bean growth in Manitoba is 24°C because
beans are a warm-season crop. Even though extreme temperatures (above 30 or
below 10°C) can result in reduced growth, the key climate factor for bean production
in Manitoba is frost-free period (Manitoba Agriculture, Food and Rural Initiatives,
2005)

F rost-free period refers to the time between the last spring and the ﬁrst fall
frost, and therefore corresponds to the time available for crop production. Because
Manitoba is located close to the northern limit for agriculture, late spring frost and
early fall frost can generate great economic consequences. Most pinto, navy, and
black bean varieties available in Manitoba require 90 to 100 days to reach full
maturity, while kidney and cranberry beans require an extra 10 to 14 days. All bean
varieties are susceptible to frost, which will cause the bean plant to die (Manitoba
Agriculture, Food and Rural Initiatives, 2005).

Nadler (2004) conducted a study comparing historical Manitoba weather data

to identify climate trends affecting agriculture. The study, which used data for six

112

strategic agricultural regions in Manitoba, concluded that in the last 55 to 70 years
frost-free period shows increases from 9 to 12 days at four of the analyzed locations.
Another study conducted by GeoSpatial consulting ﬁrm in collaboration with
University of Winnipeg for Saskatchewan (adyacent to Manitoba) created a climate
model that suggest a clear increasing trend in frost-free period. Table 4.2 shows the
number of frost-free days predicted by the model. The 10th percentile, 50th percentile,
and 90th percentile of the annual values are shown.

Table 4.2 Number of frost-free days

 

1970 2020 2080

 

1 0th percentile 78 83 102
501h percentile 93 105 130
90th percentile 109 121 144

 

Source: Geospatial (2005)
Closure of the Winnipeg sugar beet plant

According to Blade and Slinkard (2002), “farmers in the Red River Valley of
Manitoba are immediately down stream from a large dry bean growing area in North
Dakota. Thus, it was only natural that dry bean production increased rapidly after the
local sugar beet processing plant closed”.

Canada produces around 8% of its white sugar and co-products from
Canadian-grown sugar beets. Canadian sugar from beets production has proven to be
economically viable in locations distant to ports, where imported cane is processed.
However, Canadian production of sugar reﬁned from beets dramatically decreased
from 144,000 Mt in 1996 to 95,000 Mt in 1997, as a result of the closure of a plant in
Winnipeg. As a result of the closure Canadian sugar beet acreage decreased from
56,733 acres in 1996 to 33,124 acres in 1997 (Agriculture and Agri-Food Canada,

2005)

113

Sugar beet acres in Manitoba switched mostly to dry bean production due to
good margins in most parts of the prairie region of Canada (Blade and Slinkard,
2002). The graph below shows the relationship between dry bean acreage growth and
sugar beet acreage decline. However, it is important to mention that sugar beet
acreage contributed only with around 25,000 acres, while dry bean acreage increased
by around 200,000 acres from 58,333 acres (mean, 1994-1996) to 260,000 acres
(mean, 2001-2003) (Statistics Canada, 2005). Therefore, the closure of the Winnipeg
sugar beet plant contributed partially to the dry bean production grth in Manitoba.

Figure 4.19 Dry Bean and Sugar Beet Acreage in Manitoba, 1994-2003

350
300 ' JR
250 N \
/ \
200

.5. /

Dry bean

 

 

 

 

 

 

100

50
Mugarbeet
0 .-.¢r¢ﬁe.e.¢.e

seeaeeseeasss
Source: Statistics Canada (2005)

Acreage (1000 acres)

 

 

 

 

Growth of handling and processing facilities

Dry beans are a relatively new crop in Manitoba, and therefore have to
compete with traditional crops for investment in new processing facilities (Blade and
Slinkard, 2002). Dry bean industry success depends on the availability of processing
facilities to provide a variety of treatments such as cleaning, sizing, sorting, and

packaging. In recent years, the bean industry in Manitoba has been boosted by the

114

growth of handling and processing facilities, which encouraged increased seeding as
producers have more choices for marketing their beans.

In June 2004, Agricore United announced plans to build a new dry bean
facility in Carman, Manitoba. The facility, which will handle navy and colored beans,
will greatly expand the company’s existing dry bean processing capability in
Manitoba (Grainnet, 2005). Besides from Agricore United pool, there are a number of
independent bean processing and marketing facilities in Manitoba (Canada
Agriculture, 2005).

Development of new varieties suitable for Manitoba growing conditions

Dry bean seed used in Western Canada is mostly imported from the U.S.
(Statpub, 2005). However, signiﬁcant efforts are been conducted to support the
growing bean industry with varieties speciﬁcally designed for local conditions.
Funding for seed variety development has been provided by Manitoba Pulse Growers
Association, Alberta Pulse Growers, Agricore, Alberta Agricultural Research
Institute, and the Matching Investment Initiative of the federal government (Alberta
Pulse Growers, 2005).

At present, the Canadian Seed Growers Association is conducting a three
years project called “National Gene Development Strategy for control of common
bacterial Blight for the Canadian Bean Industry”. The objective of this study is to
assess the potential for the development of a dry bean seed industry in Canada

(CSGA, 2005).

115

4.3.4 Production costs1 in Canada and the United States

Canada and the U.S. are direct competitors in the international market of
common beans, due to the similarity in the market classes they produce, export
markets targeted, and geographical proximity. This section compares bean production
costs in order to assess the competitiveness of U.S. and Canadian bean production.
The comparison is made for navy and pinto beans, the major market classes in which
the U.S. and Canada compete for market shares.

Due to differences in yields and production inputs, a comparable production
cost per cwt of beans was calculated, based on enterprise budget2 information. In the
navy bean comparison, production cost and yield information for white3 beans in
Manitoba was selected to represent Canadian costs, since this province accounts for

most of Canadian navy bean production growth. For the U.S., North Dakota was

 

' In this section the term production cost refers to Selected Variable Cost rather than total production
cost.

2 Enterprise budgets are statements of the costs and income associated with a speciﬁc activity of the
farm business. The income section of an enterprise budget is calculated by multiplying an estimated
yield times an estimated price per unit of yield.

Income = Price " Yield

Following the income section the selected cash expenses include those that vary as the size of the
enterprise changes (variable cost). Cost items that are usually considered are seed, fertilizer, chemicals,
fuel and repairs on machinery, utilities, and other miscellaneous cash expenses. An operating interest
cost is also included to reﬂect the cost of the capital the enterprise is investing on the activity. The
enterprise budgets do not include overhead costs such as taxes, depreciation, insurance, and overhead
labor since this costs do not vary with the size of the activity (they are ﬁxed). The difference between
the income and the cash expenses, called gross margin or Return above Selected Variable Costs can be
used to guide business decisions (Harsh er al, 1981)

Return above Selected Variable Cost = Income - Selected Variable Cost

In this section, production cost (Selected Variable Cost) information was compiled from enterprise
budgets, which are usually designed through different methodologies (include different cost items). In
order to make a comparable measure of production costs, only items listed in all the compared budgets
were selected. Comparison between production costs in different regions can lead to erroneous
conclusions due to yield differences. Therefore, production cost (Selected Variable Cost) data were
divided by local yields in order to calculate a comparable cost per unit (cwt). Yield information for the
calculation cost per cwt corresponds to state (U .S.) or province (Canada) average yields. Production
cost (Selected Variable Cost) data were obtained from enterprise budgets at the state level.

3 Term used in Canada for Navy beans

116

selected for the comparison, since navy bean production has decreased in this state.
Although Michigan accounts for most of the decrease in navy bean production,
unfortunately, navy bean production cost data were not available for Michigan.

For the pinto case, the production cost comparison was made between
Manitoba, Idaho and North Dakota. Manitoba is the province that accounts for most
of Canada’s pinto bean production increase. While Idaho has experienced a
signiﬁcant decrease in pinto bean production, pinto bean production in North Dakota
has increased in recent years.
4.3.4.1 Navy bean production costs in Canada and the United States

During 1999-2003, navy bean production cost in Manitoba averaged $U.S.
8.5/cwt, compared to$U.S.7.2/cwt in North Dakota, which suggests a cost advantage
for the U.S. However, while Manitoba’s production cost decreased at an annual rate
of 2.0% from 1999 to 2003, North Dakota’s production cost only decreased at a rate
of 0.8%, thereby decreasing the gap between U.S. and Canadian bean production
cost. The ratio between Canadian and U.S. bean production cost decreased from 1.2
(mean, 1999-2001) to 1.1 (mean, 2001-2003).

Table 4.3 shows costs used to compare navy bean production in Canada1 and

the U.S.2 and the yields used to estimate a comparable cost per cwt.

 

' Manitoba represents Canada in the comparison, as this province accounts for most of the country’s
navy bean production growth. Navy bean production cost and yield information were obtained from
Manitoba Agriculture Food and Rural Initiatives.
Navy bean production cost information was available from enterprise budgets by Manitoba Agriculture
Food and Rural Initiatives and are speciﬁc for navy beans. Yield information corresponds to the
province average for navy beans from Manitoba Agriculture Food and Rural Initiatives

North Dakota represents the U.S. in the comparison, as this state accounts for 36.3% of the U.S. navy
bean production and has experienced production decrease. Production cost and yield information were
obtained from North Dakota State University at the dry bean level. Information at the dry bean level is
considered representative of navy bean production as 23.5% of North Dakota’s dry bean acreage is
planted to navy bean.

117

Table 4.3 Navy Bean Production Selected Variable Cost in Manitoba and North

Dakota, 1999-2003
Canada, Manitoba. Navy Beans (white beans)
1999 2000 2001 2002 2003

 

 

 

Yield (pounds/acre) 1,600 1 .380 1 .440 1.620 1,620
Total Production Cost (USS/cwt) 8.57 9.41 8.16 7.93 8.29
Description of Costs (US$/acre)

Seed 28.77 25.75 17.43 29.37 23.73
Fertilizer 18.17 17.07 15.62 16.72 19.90
Herbicide. fungicide, insecticide, other 60.57 60.60 56.81 58.27 64.99
Fuel and lub 8.04 7.09 8.92 8.80 8.59
Repairs and Maintenance 6.46 6.46 6.20 6.11 6.84
Crop Insurance 9.46 7.52 7.23 5.09 6.09
Interest on operating 5.65 5.37 5.32 4.04 4.20
Total Production Cost (US$lacre) 137.11 129.86 117.52 128.40 134.34
U. 8.. North Dakota, Navy Beans

1999 2000 2001 2002 2003

Yield (pounds/acre) 1 .460 1 .460 1.560 1.550 1,640
Total Production Cost (USS/cwt) 7.25 7.44 6.96 7.12 7.00
Description of Costs (USS/acre)

Seed 28.00 27.50 25.00 27.00 29.00
Fertilizer 6.81 8.69 7.03 8.06 9.75
Herbicide. fungicide, insecticide, other 33.32 33.32 38.27 43.00 42.65
Fuel and lub 6.57 9.03 9.72 6.83 7.81
Repairs and Maintenance 12.77 13.01 12.75 11.93 12.25
Crop Insurance 14.00 12.50 11.10 10.40 10.40
Interest on operating 4.32 4.56 4.67 3.08 3.00
Total Production Cost (US$lacre) 105.79 108.61 108.54 110.30 1 14.86

 

Source: Manitoba Agriculture, Food and Rural Initiatives, 2005; NDSU Extension
Service, 2005; NASS, 2005.

Based on the analysis of navy bean production cost, it appears that Canada has
increased its competitiveness in the navy bean market by reducing the gap between
Canadian and U.S. navy production cost. This is consistent with the explosive growth
in both Canada’s production and exports of navy beans that has occurred in recent

y ears and the Canadian consolidation in the export market.

\

Pl"Oduction cost information was available ﬁ'om enterprise budgets by North Dakota State University at
as dry bean level. Information at the dry bean level is considered representative of navy bean
Production as 23.5% of North Dakota’s dry bean acreage corresponds to navy bean. Yield information
Corresponds to the state average for navy beans from NASS

118

Figure 4.20 Navy Bean Selected Variable Cost in Manitoba and North Dakota, 1999-
2003

 

10.0
9.0

 

I I Canada. Manitoba
4 I U.S., North Dakota

 

 

 

Total Selected Variable Cost (USS/cwt)

1999 2000 2001 2002 2003

Source: Manitoba Agriculture, Food and Rural Initiatives, 2005; NDSU Extension
Service, 2005; NASS, 2005.

4.4.3.2 Pinto bean production costs in Canada and the United States
Table 4.4 shows the costs used to compare pinto bean production in
Manitoba], Idahoz, and North Dakota3 and the yields used to estimate a comparable

cost per cwt.

 

' Manitoba, which is used to represent Canada in the pinto bean production cost comparison, accounts
for most of Canadian pinto bean production and growth.

Production cost information for Manitoba is only available for navy beans. Under the assumption of
similar production cost for navy and pinto beans, navy bean production costs were used in this section.
Yields are speciﬁc for colored beans in Manitoba. Colored beans in Canada consist on several market
classes including pinto beans. Navy bean production cost and colored bean yield information were
available from Manitoba Agriculture Food and Rural Initiatives.

2 Idaho was selected to represent U.S. pinto bean production since this state accounts for 19.7% of the
decrease in U.S. pinto bean production.

Production cost information was obtained from University of Idaho’s crop budgets for dry beans. Dry
bean data are considered representative of pinto bean production, as 30.1% of Idaho’s dry bean acreage
is planted to pinto bean. . Irrigation is included in Idaho’s production cost since this is the item that
explains Idaho’s higher yields. Therefore, irrigation must be considered in this section to make a valid
comparison. Yield information was available for pinto beans from NASS at the state average level

3 North Dakota was included in the pinto bean production cost comparison, as this state is the major
U.S. pinto bean producer, accounting for 45.7% of the total production and showing signiﬁcant
growth.

Production cost information was available from North Dakota State University crop budgets at the dry
bean level. Dry bean data are considered representative of pinto bean production, as 68.1% of North

119

Table 4.4 Pinto Bean Selected Variable Cost in Manitoba, Idaho and North Dakota,

 

 

 

 

1997-2003

1997 1999 2001 2003
Canada. Manitoba. Pinto (colored) Beans
Yield (pounds/acre) 1 .540 1,570 1.680
Total Production Cost (USS/cwt) 8.9 7.5 8.0
Description of Costs (US$/acre)
Seed - 28.8 17.4 23.7
Fertilizer - 18.2 15.6 19.9
Herbicide, fungicide, insecticide. other - 60.6 56.8 65.0
Fuel and lub - 8.0 8.9 8.6
Repairs and Maintenance - 6.5 6.2 6.8
Crop Insurance - 9.5 7.2 6.1
Interest on operating - 5.6 5.3 4.2
Total Production Cost (US$lacre) - 137.1 117.5 134.3
U.S.. Idaho. Pinto Beans
Yield (pounds/acre) 2,200 2,170 2,420 2.300
Total Production Cost (US$/cwt) 8.2 8.3 7.7 8.5
Description of Costs (USS/acre)
Seed 35.0 36.0 27.0 27.0
Fertilizer 22.7 18.0 32.5 34.0
Herbicide. fungicide, insecticide. other 13.1 12.3 13.4 13.6
Irrigation 52.9 58.5 56.9 59.6
Fuel and lub 20.3 20.6 24.9 28.8
Repairs and Maintenance 13.0 14.1 13.5 14.9
Crop Insurance 12.0 10.5 10.5 10.5
Interest on operating 10.6 10.4 7.9 6.1
Total Production Cost (USS/acre) 179.5 180.3 186.5 194.5
U. 8.. North Dakota, Pinto Beans
Yield (pounds/acre) 1 .240 1 .460 1.550 1 .480
Total Production Cost (US$lcwt) 8.5 7.2 7.0 7.8
Description of Costs (US$/acre)
Seed 28.0 28.0 25.0 29.0
Fertilizer 3.0 6.8 7.0 9.8
Herbicide, fungicide. insecticide. other 33.2 33.3 38.3 42.7
Fuel and Iub 8.4 6.6 9.7 7.8
Repairs and Maintenance 12.1 12.8 12.8 12.3
Crop Insurance 15.4 14.0 1 1.1 10.4
Interest on operating 5.2 4.3 4.7 3.0
Total Production Cost (US$lacre) 105.3 105.8 108.5 1 14.9

 

Source: Manitoba Agriculture, Food and Rural Initiatives, 2005; NDSU Extension

Service, 2005; University of Idaho Extension, 2005; NASS, 2005.

 

Dakota’s dry bean acreage is planted to pinto bean. Yield information was available for pinto beans

from NASS at the state average level.

120

During 1997-2003', pinto bean production costs in Manitoba averaged $U.S.
8.1/cwt while production costs averaged $U.S. 8.6/cwt in Idaho and $U.S. 7.63/cwt in
North Dakota. F rom 1997 to 2003, Manitoba’s production cost decreased at an annual
rate of 2.3%, while Idaho’s production cost increased at an annual rate of 0.2% and
North Dakota’s production cost decreased by 1.1% annually.

Figure 4.21 Pinto Bean Production Selected Variable Cost in Manitoba, Idaho and
North Dakota, 1997-2003

10.0
9.0

 

 

 

I Canada. Manitoba
I U.S.. Idaho
:1 U.S.. North Dakota

 

 

 

 

 

 

 

Total Selected Variable Cost (USSIcwt)
0|
0

1997 1999 2001 2003

Source: Manitoba Agriculture, Food and Rural Initiatives, 2005; NDSU Extension
Service, 2005; University of Idaho Extension, 2005; NASS, 2005.

Based on the analysis of pinto bean production cost, it appears that North
Dakota and Manitoba have a cost advantage in pinto bean production over Idaho
whose production cost was the highest. The production cost analysis is consistent
with the increase in bean production growth in North Dakota and Manitoba and the

decrease in Idaho’s pinto production in recent years.

 

‘ Only four sample budgets for four years were available for all the regions, included in the
comparison.

121

4.4 Summary

During 1994-2002, Canadian common bean production averaged 237,111 Mt
per year, equals to 20.4% of the U.S. common bean production. However, Canadian
production increased sharply over the period at an annual rate of 11.6%, while U.S.
production decreased at a rate of -2.8%. Navy and pinto beans accounted for most of
the increase in Canadian bean production and for most of the decrease in U.S. Navy
bean production increases in Canada will contribute to maintaining Canada’s
dominant position in the UK. market. Furthermore, it is possible that Canada will
capture U.S. pinto market shares in Mexico after January 2008 when the bean quota
system for this market will be eliminated.

The Canadian bean industry is more export oriented than its U.S. counterpart;
exporting around 80% of the domestic production whereas the U.S. exports 30% of
its domestic output. Both the increase in Canadian exports and decrease in U.S.
exports suggest that Canada is more competitive in the export market than the U.S.
During 1994-2002, Canadian common bean exports averaged 188,033 Mt per year,
equals to 54.3% of the U.S. common bean exports. However, Canadian exports
increased sharply at an annual rate of 10.9%, while U.S. exports decreased at a rate of
1.7%. By 2002, Canada exported 277,600 Mt compared to 301,038 Mt for the U.S.

Canada and the U.S. compete in similar markets, such as the UK. and Italy in
the navy bean market class and Dominican Republic in the pinto bean market class.
Moreover, competition in the Mexican market for pinto and other colored beans is
anticipated after January 2008. Canada and the U.S. will sustain or lose their

positioning in the export market based on their relative competitiveness—which is

122

largely determined by production costs. Analysis of production cost data suggests that
Canada has increased its competitiveness in the common bean market by reducing the
gap between Canadian and U.S. bean production cost. This trend suggests that
Canada will be able to sustain its growing share on the export market. However, the
U.S. still shows a cost advantage particularly in the North Dakota region, which
shows pinto bean production growth. This suggests that the U.S. may be able to
maintain its positioning in the Mexican market (colored beans) aﬁer NAFTA

eliminates the quota system.

123

CHAPTER FIVE

THE EFFECT OF THE U.S. FARM BILL ON UNITED STATES
INTERNATIONAL TRADE OF COMMON BEANS

5.1 Analysis of bean and substitute crops acreage by state

During 1994-2003, signiﬁcant acreage changes occurred in the main bean-
producing states, as brieﬂy mentioned in Chapter Two. This chapter analyzes acreage
trends for bean and other crops in states that showed major changes in bean
production. The objective of this analysis is to identify crops that have taken away
acres from bean production and the factors that caused these acreage shifts. In order
to identify acreage-competing crops, an analysis of county-level acreage trends is
conducted for counties that showed major changes in bean production. A proﬁtability
analysis «using enterprise budget1 information-- is conducted to identify the causes
for the identiﬁed acreage shifts.
5.1.1 Michigan

During 1994-2003, Michigan experienced a signiﬁcant decrease in bean
acreage, which affected all market classes. Michigan total bean area declined from
367,500 acres (mean, 1994-1996) to 206,900 acres (mean, 2001-2003). As a result,

Michigan navy bean production declined from 143,767 Mt (mean 1994-1996) to

 

I In this chapter, enterprise budget analysis is used in a proﬁtability analysis for navy and pinto beans
against acreage-competing crops. In each comparison, a section called Production Cost Trends shows
Selected Variable Costs taken from enterprise budgets. Then, a section called Relative Proﬁtability
Trends shows the interaction of price, yield, and production cost data, which determines Returns above
Selected Variable Cost for the compared crops. Yield and price information for the calculations
corresponds to state averages. Since the objective of this section is to compare proﬁtability of different
crops as a determinant of planting decision, prices include the effect of the U.S. price support program
for commodities included in the policy. while common bean prices correspond to market prices.
Finally, in the last part of the chapter, the effect of the U.S. Farm Bill over the estimated Retum above
Selected Variable Cost is discussed for North Dakota and Idaho. For a detailed description of
Enterprise Budget Analysis refer to footnote in section 4.3.4

124

36,048 Mt (mean 2001-2003), black bean production declined from 54,934 Mt to
46,081 Mt, and kidney bean production declined from 15,890 Mt to 13,075 Mt. Since
navy beans accounted for 85% of the decrease in Michigan bean production, an
analysis of acreage trend is conducted to identify factors that have contributed to the
observed changes in bean acreage.

During 1994-2003, Michigan navy bean acreage decreased by 139,750 acres,
from 213,917 acres (mean, 1994-1996) to 74,167 acres (mean, 2001-2003), at an
annual rate of 14.0%. Approximately 74% of the acreage decrease occurred in Huron
(45,000 acres), Tuscola (28,333 acres), Sanilac (15,800 acres) and Bay (13,767 acres)
(Figure 5.1 and Table 5.1).

Figure 5.1 Analysis of County Navy Bean Acreage in Michigan and Selected
Counties,1994-2003'

 

250

 

200 —-
Michigan

1 50

100 Hum" \V/\\

50 Tuscola \ ﬂ\/\\
8 y V \/‘\.

 

 

 

Bean acreage (1000 acres)

.1;

 

 

Sanilac

 

H l ‘T

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: NASS (2005)

 

‘ 2003 Navy bean production by county was forecasted based on production for the period 1994-2002.

125

Table 5.1 Navy Bean Acreage in Michigan and Selected Counties, 1994-2003

 

Mean Mean Relative
1994-1996 2001-2003 Actgzég‘snge change G'°‘2’,2‘)'ate
County (acres) (acres) (%)
Huron 82,333 37.333 (45.000) (54.66) (10.68)
Tuscola 42,667 14,333 (28,333) (66.41) (14.43)
Sanilac 19,333 3,533 (15,800) (81.72) (21.56)
Bay 21,667 7,900 (13,767) (63.54) (13.42)
Gratiot 12,567 5,100 (7,467) (59.42) (12.09)
Saginaw 10,167 4,000 (6,167) (60.66) (12.48)
Arenac 6,167 1,067 (5,100) (82.70) (22.17)
Michigan 213,917 74,167 (139,750) (65.33) (14.04)

 

Source: NASS (2005)
Huron County

During 1994-2003, Huron County’s crop acreage, which averaged 406,880
acres (CV=4.0%), was distributed among corn (31.2%), navy beans (14.2%), sugar
beets (12.8%), wheat (11.1%), and soybeans (10.0%). Total crop acreage decreased at
an annual rate of 1.2%-- from 425,833 acres (mean, 1994-1996) to 390,533 acres
(mean, 2001-2003). Shift-sharel analysis of changes in crop acreasge showed that
navy beans accounted for most (60.1%) of the acreage decrease, while soybeans
accounted for most (62.0%) of the increase in acreage. In other words, navy bean

acreage decreased while soybeans acreage increased (Figure 5.2).

 

' In Chapter Five, shift-share analysis was used in the analysis of acreage trends at the county level.
Acreage data for all the main crops in every analyzed county was obtained. Due to the variability of
crop shares as percentage of total acreage, absolute or relative change methods showed inconsistent
results. Shift-share analysis identiﬁed and measured the gains or losses of crop areas compared with
the county trend. Therefore, it was possible to identify what crops are growing (gaining market share)
and declining (loosing market share). Therefore it was possible to infer conclusions on crop
substitutability.

126

Figure 5.2 Navy Bean and Soybean Acreage in Huron County, Michigan, 1994-2003

90
80
70
60
50
4O
30
20
10

0

(1000 acres)

Soybeans

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: NASS (2005)

During 1994-2003, Huron County’s navy bean acreage, which averaged
57,950 acres (CV=36.0%), decreased at an annual rate of 10.7%-- from 82,333 acres
(mean, 1994-1996) to 37,333 acres (mean, 2001-2003). The share of the acreage
planted to navy beans decreased from 19.3% to 9.6%. On the other hand, while
soybeans acreage averaged 40,500 acres (CV=42.3%), it increased at an annual rate
of 16.1%» from 20,500 acres to 58,167 acres. Soybean’s share of total Huron acreage
increased from 4.8% to 14.9%. Thus, the increase in soybean acres was equal to
83.7% of the decline in navy bean acres.
Tuscola County

During 1994-2003, Tuscola County’s crop acreage, which averaged 289,820
acres (CV=7.7%), was distributed among corn (29.3%), soybeans (24.1%), sugar
beets (10.3%), wheat (9.1%), and navy beans (9.6%). Total crop acreage in Tuscola
County decreased at an annual rate of 2.4%—- from 317,867 acres (mean, 1994-1996)

to 269,067 acres (mean, 2001-2003). Shift-share analysis showed that navy beans

127

accounted for most (46.3%) of the acreage decrease, while soybeans accounted for
most (88.5%) of the acreage increase. In other words, navy bean acreage decreased,
while soybeans acreage increased (Figure 5.3).

Figure 5.3 Navy Bean and Soybean Acreage in Tuscola County, Michigan, 1994-
2003

 

120

100
Soybeans /\
80 W T *3
60
4o *‘r—Ik

\\ /\\Navy Beans
20

0 I I I r I I I r I
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

 

 

(1000 acres)

 

 

 

 

 

Source: NASS (2005)

During 1994-2003, Tuscola’s navy bean acreage, which averaged 27,700
acres (CV=45.2%), decreased at an annual rate of 14.4%-- from 42,667 acres (mean,
1994-1996) to 14,333 acres (mean, 2001-2003). Navy bean’s share of total acreage
decreased from 13.4% to 5.3%. On the other hand, while soybeans acreage averaged
69,950 acres (CV=21.9%), it increased at an annual rate of 7.2%-- from 53,333 acres
to 86,833 acres. Soybean’s share of total acreage increased from 16.8% to 32.3%.
Thus, the increase in soybean acres was equal to 118% of the decrease in navy bean
acres.

Sanilac County
During 1994-2003, Sanilac County’s crop acreage, which averaged 360,790

acres (CV=5.3%), was distributed among soybeans (30.8%), corn (28.8%), wheat

128

(13.6%), sugar beets (5.3%), and navy beans (2.9%). Total crop acreage decreased at
an annual rate of 1.5%—- from 380,967 acres (mean, 1994-1996) to 343,967 acres
(mean, 2001-2003). Shift-share analysis showed that navy beans accounted for 24.9%
of the acreage decrease, while soybeans accounted for most (89.2%) of the acreage
increase. In other words, navy bean acreage decreased while soybeans acreage
increased (Figure 5.4).

Figure 5.4 Navy Bean and Soybean Acreage in Sanilac County, Michigan, 1994-
2003

 

160
140 .

120 /\\.
100 N

+___,/"/ Soybeans

 

 

 

80
60
40

 

 

(1000 acres)

 

Navy Beans

20 k :M‘
/O——.
0

r I I I V I ﬁ

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

 

 

 

 

 

Source: NASS (2005)

During 1994-2003, while Sanilac’s navy bean acreage averaged 10,500 acres
(CV=65.8%), it decreased at an annual rate of 21 .6%-- from 19,333 acres (mean,
1994-1996) to 3,533 acres (mean, 2001-2003). Navy bean’s share of total acreage
decreased from 5.1% to 1.0%. On the other hand, while soybeans acreage averaged
111,000 acres (CV=16.9%), it increased at an annual rate of 5.7%-- from 87,333 acres
to 128,667 acres. Soybean’s share of total acreage increased from 22.9% in 1994-
1996 to 37.4% in 2001-2003. Thus, the increase in soybean acres was equal to 261%

of the decline in navy bean acres.

129

Bay County

During 1994-2003, Bay’s crop acreage, which averaged 151,820 acres
(CV=5.3%), was distributed among corn (28.7%), soybeans (24.1%), sugar beets
(13.7%), dry beans excluding navy beans (11.5%), and navy beans (8.5%). Total crop
acreage decreased at an annual rate of 0.6%-- from 153,383 acres (mean, 1994-1996)
to 146,783 acres (mean, 2001-2003). Shift-share analysis showed that navy beans
accounted for most (50.5%) of the acreage decrease, while soybeans accounted for
most (70.4%) of the increase in acreage. In other words, navy bean acreage
decreased, while soybeans acreage increased (Figure 5.5).

Figure 5.5 Navy Bean and Soybean Acreage in Bay County, Michigan, 1994-2003

50

Soybeans

[0'00
000

(1000 acres)

Navy Beans

..L_s
01°01

 

O

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: NASS (2005)

During 1994-2003, while Bay County’s navy bean acreage averaged 12,830
acres (CV=51.1%), it decreased at an annual rate of 13.4%-- from 21,667 acres
(mean, 1994-1996) to 7,900 acres (mean, 2001-2003). Navy bean’s share of total
acreage decreased from 14.1% to 5.4%. On the other hand, while soybeans acreage

averaged 36,630 acres (CV=22.6%), increasing at an annual rate of 7.4% from 26,000

130

acres to 42,767 acres. Soybean’s share of total acreage increased from 17.0% to
29.1%. Thus, the increase in soybean acres was equal to 121% of the decline in navy
bean acres.

This analysis of bean and other crop acreage trends in selected Michigan
counties conﬁrm that there has been a dramatic shiﬁ of acreage from navy bean
production to soybean production.
5.1.1.1 Analysis of the Profitability of Navy Beans and Soybeans

An analysis of the proﬁtability of navy beans and soybeans in Michigan,
based on a partial budgeting approach, is used to examine the causes of these acreage
shifts.

Price Trends

During 1994-2003, both navy bean and soybean prices showed a decreasing
trend. The navy bean price decreased at an annual rate of 1.8%-- from USS 18.8/cwt
(mean, 1994-1996) to U.S.$ 16.5/cwt (mean, 2001-2003); while the soybean price
decreased at an annual rate of 2.8%, ﬁom U.S.$ 6.4/bushel (mean, 1994-1996) to
U.S.S 5.2/bushel (mean, 2001-2003). However, navy bean prices showed more
variability (higher coefﬁcient of variation), which indicated greater price risk
associated with navy bean production. The price of navy beans price averaged U.S.$
15.9/cwt (CV= 26.0%), ranging from a minimum of U.S.$ 103/cwt (January 2001)
to a maximum of U.S.S 24.0/cwt (Jun 1999). In contrast, soybean price averaged
U.S.S 5.7/bushel (CV= 19.2%), ranging from to a minimum of U.S.S/bushel 4.1 to a

maximum of USS/bushel 8.6 (May 1997) (October 2001) (Figure 5 .6).

131

The higher variability in navy bean prices, compared to soybean prices, is
consistent with the increase in soybean production and decrease in navy bean
production that Michigan experienced in recent years (Figure 5.6). It is important to
point out that soybeans are included under the government, while common beans are
not eligible for beneﬁts under the farm bill.

Figure 5.6 Navy Bean and Soybean Prices in Michigan, 1994-2003

 

 

 

 

 

 

 

 

 

 

 

 

 

3O 20

A Navy beans ~~ 18 A
g 25 u I _ " 16 g
g 20 TI‘. {5. 11 _ 71 ‘“ 14 g
f; .3" Tim k -- 12 V
o 15 10 8
"a «31.1 a
g 10 Lilli-1 LIPI- ” 8 t:
3 . .1 6 g
3' 5 7" 4 o
'2' Soybeans ~- 2 m

3. 3. 33 5 3i 3. 8 5 3 8

C C C C C C C C C C

(U (U (U (U (U (U (U (U (U (U

'5 .3 '5 3 ﬂ '3 ﬂ '5 3 .3

Source: NASS (2005); ERS (2005)
Yield Trends

During 1994-2003, both navy bean and soybean yields showed a slightly
decreasing trend. Navy bean yields decreased at an annual rate of 1.5%-- from 1,506
pounds/acre (mean, 1994-1996) to 1,353 pounds/acre (mean, 2001-2003); while
soybean yield decreased at an annual rate of 1.3%-— from 35.2 bushel/acre (mean,
1994-1996) to 32.0 bushel/acre (mean, 2001-2003).

The yield for navy beans showed much more variability (higher coefﬁcient of
variation) than soybean yields, which indicated higher production risk associated with

navy bean production. The yield for navy beans averaged 1,556 pounds/acre (CV=

132

28.9%), ranging from a minimum of 570 pounds/acre (2001) to a maximum of 2,300
pounds/acre (1999), while soybean yields averaged 35.5 bushel/acre (CV=13.8%),
ranging from a minimum of 27.5 bushel/acre (2003) to a maximum of 40.0
bushel/acre (1995) (Figure 5.7). Higher variability in navy bean yields compared to
soybean yields, is consistent with the increase in soybean production and decrease in
navy bean production that Michigan experienced in recent years (Figure 5.7).

Figure 5.7 Navy Bean and Soybean Yield in Michigan, 1994-2003

 

2500 250
Navy beans
200

[VA/\[J\ /\..
\/

 

N
O
O
O

 

‘8”

 

 

 

Navy bean yield (pounds/acre)
Soybean yield (bushellacre)

 

 

1 000
Soy beans V
500 50
——\/_ JM
0 T I I I I I I I I o

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: NASS (2005)

Production Cost’ Trends
Production cost information was compiled for 1992, 1995, and 2001 since

production cost data were not available for other years (Table 5.2).

 

' In this section production cost refers to Selected Variable Cost, which are called Total Selected Cash
Expenses in the enterprise budgets by Michigan State University.

133

Table 5.2 Soybean and Navy Bean Selected Variable Cost, Michigan, 1992, 1995,

 

 

 

 

2001
Michigan Soybeans
Descnption of Costs (US$/acre) 1992 1995 2001
Seed 14.4 13.2 21.4
Fertilizer 1 1.6 38.3 28.9
Weed control 27.3 35.5 15.0
Fuel and Iub 8.8 8.0 7.3
Utilities 1.5 1.5 1.5
Freight 5.0 7.5 7.5
Repairs and Maintenance 17.5 20.2 18.0
Marketing 0.3 0.6 2.5
Selected Variable Cost (USS/acre) 86.4 124.8 102.1
Michigan Navy Beans
Description of Costs (US$/acre) 1992 1995 2001
Seed 20.0 26.0 37.5
Fertilizer 18.4 26.0 38.9
Weed control 12.0 29.0 38.5
Fuel and lub 8.7 10.5 14.7
Utilities 1.5 1.5 2.0
Freight 5.7 6.1 4.8
Repairs and Maintenance 18.5 20.6 20.0
Marketing 0.9 0.9 2.9
Selected Variable Cost (US$/acreL 85.7 ' 120.6 159.2

 

Source: Department of Agricultural Economics, Michigan State University (2005)
During 1992-2001, navy bean production cost shows an upward trend,
increasing from $ 85.7 per acre in 1992 to $ 159.2 per acre in 2001. During the

period, there is not a clear trend in soybean selected variable cost (Figure 5.8).

134

Figure 5.8 Costs of Soybean and Navy Bean Production, Michigan, 1992, 1995, 2001

1 80
160
140
1 20
1 00
80
60
40
20

 

0 Navy been
I Soybean

 

 

 

 

Selected Variable Cost (USSIacre)

1992 1995 2001

Source: Department of Agricultural Economics, Michigan State University (2005)
Relative Proﬁtability’ Trends

During 1992-2001, yield, price, and production cost trends changed the
relative proﬁtability of navy beans, compared to soybeans, as shown in Figure 5.9. In
1992, navy bean production was 3.1 times more proﬁtable, in terms of returns above
selected variable cost per acre, than soybean production in Michigan. This ratio
decreased to 1.4 in 1995 and to 0.9 in 2001. Therefore, the relative proﬁtability of

navy bean production decreased, compared to soybeans.

 

' In this section profitability is measured in terms of Returns above Selected Variable Costs per acre. In
the calculation price, yield, and production cost data were used. Production cost data corresponds to
Total Selected Variable Costs per acre and includes the items listed above. Returns are calculated as
(Price‘Yield)-Production Cost. Due to the limitation on production cost data, Returns above Selected
Variable Costs were calculated only for 1992, 1995, and 2001.

135

Figure 5.9 Returns Above Variable Costs per Acre for Navy Beans and Soybeans in
Michigan, 1992, 1995, 2001

§ 250.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

O
3 200.00 1
II
1:
g “ 00
150.

g g DNavy bean

3

ISO been

a g 100.00 y
(n v
0
>
o
.9
II
5
I!

 

 

 

 

   

 

50.00 '—

1992 1995 2001

 

 

 

Source: Department of Agricultural Economics, Michigan State University (2001)
5.1.1.2 Conclusions

The data presented in this section suggests that the acreage shifts in Michigan
from bean to soybeans can be explained in terms of these crops’ relative proﬁtability
and risk. During the past decade, navy bean production lost its proﬁtability advantage
over soybeans, as a consequence of price, yield, and production cost trends. While
navy bean and soybean yields show similar trends, navy bean prices decreased at a
faster rate than soybean prices. Furthermore, enterprise budget information suggests
an increase in the variable costs of navy bean production. Compared to soybeans,
navy bean production has faced higher risk, since navy bean price, yield, and
production cost were more volatile than their soybean counterparts.
5.1.2 Idaho

During 1994-2003, Idaho’s bean acreage decreased 28.9%" from 113,300
acres (mean, 1994—1996) to 80,600 acres (mean, 2001-2003) (Figure 5.10). As a

result, Idaho’s pinto bean production decreased by 20,551 Mt from 50,863 Mt to

136

30,312 Mt. Idaho’s navy bean production also decreased by 1,634 Mt-- from 5,463
Mt to 3,829 Mt, while great northern bean production decreased from 6,023 M to
3,510 Mt and Idaho’s production of “other” common beans decreased from 35,170
Mt to 13,250 Mt. Since several market classes account for Idaho’s bean production
decrease (and due to data availability), acreage trend analysis is conducted at the dry

bean level.

Figure 5.10 Bean Acreage in Idaho and Selected Counties, 1994-2003

 

160

 

 

 

 

 

 

Hm Falls

40 -———~— mm.“ ———
Jerome \/\

20 L‘

 

 

 

g 140 .
120 .
g \. Idaho

100 .m

V

E 30 \VA\
U
E 60
8
5
8

v

x. A A 4
Canyon ' V r W

t ﬁ'

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

 

 

 

 

0

Source: NASS (2005)

During 1994-2003, Idaho’s dry bean acreage decreased by 32,700 acres, at an
annual rate of 4.8%. About 60% of the acreage decrease occurred in Twin Falls
(22,600 acres), Canyon (9,000 acres), and Jerome (5,933 acres) (Figure 5.10 and

Table 5.2).

137

Table 5.3 Dry Bean Acreage in Idaho and Selected Counties, 1994-2003

 

Mean Mean

 

Actual change Relative Growth
C°“"ty 1922;;296 232322? (acres) change (%) rate (%)
Twin Falls 48,233 25,633 (22,600) 46.86% (8.64)
Canyon 15,933 6,933 (9,000) -56.49% (11.21)
Jerome 16,467 10,533 (5,933) -36.03% (6.18)
Idaho 1 13,300 80,600 (32,700) -28.86°/o (4.75)

 

Source: NASS (2005)
Twin Falls County

During 1994-2003, crop acreage in Twin Falls County averaged 215,670 acres
(CV=8.6%), which was distributed among barley (18.0%), winter wheat (14.0%),
beans (13.0%), corn (12.4%), sugar beets (8.7%), and other crops. Total crop acreage
decreased at an annual rate of 2.1%-- from 230,067 acres (mean, 1994-1996) to
197,933 acres (mean, 2001-2003). Shift-share analysis showed that dry beans
accounted for most (40.8%) of the acreage decrease, while corn accounted for most
(36.6%) of the acreage increases. In fact, dry bean acreage show the largest decrease
in the county acreage (22,600 acres), while corn acreage show the largest increase

(12,567 acres) (Figure 5.11).

138

Figure 5.11 Bean and Corn Acreage in Twin Falls County, Idaho, 1994-2003

 

60

\

MW Beans

 

01
O

 

 

(1000 acres)
'8 8 a
8’
3%

 

3
1\
ct

 

 

 

 

I T

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: NASS (2005)

During 1994-2003, Twin Falls County’s dry bean acreage, which averaged
37,370 acres (CV=28.6%), decreased at an annual rate of 8.6%-- from 48,233 acres
(mean, 1994-1996) to 25,633 acres (mean, 2001-2003). On the other hand, corn
acreage, which averaged 20,420 acres (CV=30.8%), increased at an annual rate of
10.8%-- from 12,000 acres to 24,567 acres. Consequently, the share of dry bean
acreage decreased from 21.0% to 12.4% and com’s share of total acreage increased
from 5.2% to 12.4% (Figure 5.11).
Canyon County

During 1994-2003, Canyon County’s crop acreage, which averaged 152,930
acres (CV=17.9%), was distributed among winter wheat (18.5%), com (16.8%), sugar
beets (11.3%), dry beans (7.4%), and others. Total crop acreage decreased at an
annual rate of 5.5%-- from 186,967 acres (mean, 1994-1996) to 126,100 acres (mean,
2001-2003). Shift-share analysis indicated that wheat (32.5%) and dry beans (21.0%)

accounted for most of the acreage decrease, while corn accounted for most (67.9%) of

139

 

the acreage increase. In fact, wheat acreage decreased by 11,633 acres and dry bean
acreage decreased by 9,000 acres, while corn acreage increased by 4,900 acres
(Figure 5.12).

Figure 5.12 Bean and Corn Acreage in Canyon County, Idaho, 1994-2003

 

60

\

\\.\'/\ny Beans

Corn

/

T

 

0|
0

 

.5
O

 

(a)
O

(1000 acres)

 

N
O

 

.s
O

 

 

 

O I I I I T I ﬁr I I
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: NASS (2005)

During 1994-2003, Canyon County’s dry bean acreage, which averaged
11,330 acres (CV=41.1%), decreased at an annual rate of 11.2%-- from 15,933 acres
(mean, 1994-1996) to 6,933 acres (mean, 2001-2003). Dry bean’s share of total
acreage decreased from 8.5% to 5.5%. On the other hand, corn acreage, which
averaged 25,680 acres (CV=15.4%), increased at an annual rate of 2.8%-- from
22,867 acres to 27,767 acres. Consequently, com’s share of total Canyon County’s
acreage increased from 12.23% to 22.0% (Figure 5.12).
Jerome County

During 1994-2003, Jerome County’ crop acreage averaged 132,030 acres
(CV=15.8%), which was distributed among corn (13.6%), barley (12.9%), potatoes

(12.0%), sugar beets (11.4%), wheat (10.0%), dry beans (9.8%), winter wheat (8.8%),

140

and others. Crop acreage decreased at an annual rate of 4.8%-- from 158,200 acres
(mean, 1994-1996) to 112,000 acres (mean, 2001-2003). Shift-share analysis
indicated that wheat (29.5%), winter wheat (13.0%), potatoes (11.9%), and dry beans
(3.1%) accounted for most of the acreage decrease, while corn accounted for most
(48.4%) of the acreage increase. In fact, wheat acreage decreased by 17,333 acres,
winter wheat acreage decreased by 9,333 Mt, potatoes acreage decreased by 10,267
acres, and dry beans acreage decreased by 5,993 acres, while corn acreage increased
by 14,367 acres (Figure 5.13).

Figure 5.13 Bean and Corn Acreage in Jerome County, Idaho, 1994-2003

 

30

Ji/‘\ 1*

25
20 ’\
k

 

 

/ -4
W Dry Beans /\.

10‘ V V

15

(1000 acres)

 

 

 

 

I I j r I

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: NASS (2005)

During 1994-2003, Jerome County’s dry bean acreage, which averaged
12,960 acres (CV=29.9%), decreased at an annual rate of 6.2%-- from 16,467 acres
(mean, 1994-1996) to 10,533 acres (mean, 2001-2003). Dry bean’s share of total
acreage decreased from 10.4% to 9.4%. On the other hand, corn acreage, which

averaged 17,960 acres (CV=38.2%), increased at an annual rate of 13.3%-- from

141

10,300 acres to 24,667 acres. Com’s share of total Jerome County’s acreage increased
from 6.5% in to 22.0% (Figure 5.13).
Acreage Trend Summary

During 1994-2003, dry bean acreage in Idaho decreased signiﬁcantly. Based
on the analysis of bean and other crop acreage trends in selected Idaho counties, it is
evident that bean acreage, as well as wheat, winter wheat, and potatoes acreage
decreased. In contrast, corn is the only crop that shows an increasing acreage trend.
Therefore, this suggests that there was a shift of crop acreage from dry bean
(particularly pinto bean, due to this market class decrease in Idaho) and other crops
production to corn production. The next section includes a proﬁtability analysis based
on price, yield, production cost, and return trends in order to explain acreage shiﬁs.
5.1.2.1 Analysis of the Proﬁtability of Pinto Beans vs. Corn
Price Trends

During 1994-2003, pinto bean prices increased slightly, while corn prices
showed a decreasing trend. Pinto bean price increased at an annual rate of 0.6%, from
USS 18.7/cwt (mean, 1994-1996) to U.S.$ 19.6/cwt (mean, 2001-2003), while corn
price decreased at an annual rate of 4.2%, from USS 2.8/bushel to 2.1 U.S.Sfbushel.
However, pinto bean prices showed more variability than corn prices. Pinto bean
price averaged U.S.$ 16.5/cwt (CV= 32.4%), while corn price averaged U.S.$

2.3/bushel (CV= 23.6%) (Figure 5.14).

142

Figure 5.14 Pinto Bean and Corn Prices in Idaho, 1994-2003

 

.. 5° 5
E 45 4.5;
.9
g 40 4 a
a 35 3.5g
8 30 3 3
'C .
n 25 2.5 3
§ 20 2 5
3 o
5 1° P't be 1 5
3 5 Inc an 0.52
a , 0
3.9 3. 33 1i» 33 33 8 5 S 8
C C C C C C C C C C
(U (U III N m (U (U (U (U (U
"3 ‘3 .3 ‘7 .3 .3 W W '3 ‘5

Source: NASS (2005)
Yield Trends

During 1994-2003, both pinto bean and corn yields showed an increasing
trend. Pinto bean yield increased at an annual rate of 2.1%, from 2,043 pounds/acre
(mean, 1994-1996) to 2,366 pounds/acre (mean, 2001-2003), while corn yield
increased at an annual rate of 1.0%, from 138.3 bushel/acre to 148.3 bushel/acre.
However, pinto bean yields showed more variability, which indicates greater
production risk. Pinto bean yield averaged 2,197 pounds/acre (CV= 6.8%), while corn

yield averaged 148.0 bushel/acre (CV= 5.8%) (Figure 5.15).

143

Figure 5.15 Pinto Bean and Corn Yield in Idaho, 1994-2003

 

 

 

 

 

 

 

3000 300
E
3 2500 250 A
g WNW g
ll
5 2000 or - 200 3
o s
5 s
g; 1500 72" AR 150 a
3, Corn %
g 1000 100 ';,
8 E
'° 0
g 500 50 U
E
0 T I I I I I I I I o

 

 

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: NASS (2005)
Production Cost’ Trends

During 1997-2003, pinto bean selected variable cost (Table 5.4) shows a
relatively constant trend, while com selected variable cost shows an upward trend,
increasing by 8.2%, from U.S. $ 308.2/acre in 1997 to U.S. $ 333.3/acre in 2003

(Figure 5.16).

 

' In this section production cost refers to Selected Variable Costs, which are called Total Operating
Costs in the enterprise budgets by the College of Agriculture and Life Sciences at University of Idaho.
Due to limited data availability information was compiled for 1997, 1999, 2001, and 2003 for
Commercial Dry Bean and Field Corn. Information at the dry bean level is considered representative of
pinto bean production as 30.1% of Idaho’s dry bean acreage corresponds to pinto bean.

144

Table 5.4 Pinto Bean and Com Selected variable cost in Idaho, 1997-2003

 

Idaho, Pinto Beans

 

 

 

Description of Costs (USS/acre) 1997 1999 2001 2003
Seed 35.0 36.0 27.0 27.0
Fertilizer 22.7 18.0 32.5 34.0
Herbicide, fungicide, insecticide 13.1 12.3 13.4 13.6
Irrigation 52.9 58.5 56.9 59.6
Fuel and lub 20.3 20.6 24.9 28.8
Labor 49.3 55.9 42.9 44.1
Machinery operation 51.9 49.6 51.2 51.0
Repairs and Maintenance 13.0 14.1 13.5 14.9
Crop Insurance 12.0 10.5 10.5 10.5
Interest on operating 10.6 10.4 7.9 6.1
Selected Variable Cost (USS/acre) 280.7 285.8 280.7 289.6
Idaho, Corn

Description of Costs (USS/acre) 1997 1999 2001 2003
Seed 38.8 40.0 33.8 33.8
Fertilizer 59.8 46.2 48.7 49.4
Herbicide, fungicide, insecticide 8.8 9.3 25.6 27.9
Irrigation 73.6 78.4 85.5 99.6
Fuel and lub 14.4 14.6 15.1 17.4
Labor 35.7 40.5 28.1 28.8
Machinery operation 44.5 60.8 63.3 43.5
Repairs and Maintenance 9.2 10.0 8.6 9.5
Crop Insurance . 10.9 10.9 10.0 15.0
Interest on operating 12.6 12.1 10.8 8.5
Selected Variable Cost (USS/acre) 308.2 322.6 329.4 333.3

 

Source: University of Idaho, 2005

Figure 5.16 Pinto Bean and Com Selected variable cost in Idaho, 1997-2003

a

330
320
31 0
300
290
280
270
260
250

 

El Corn
I Pinto

 

 

 

 

     

Selected Variable Cost (USS/acre)

   

1997 1999 2001 2003

Source: University of Idaho, 2005

145

Relative ProfitabilityI Trends

During 1997-2003, pricez, yield, and production cost trends determined the
relative proﬁtability of pinto bean and corn. Corn returns above selected variable cost
were always positive, averaging U.SS 86.6/acre (CV=60.4%), while pinto bean
returns were negative in 1999 and averaged U.S.$ 90.5/acre (CV=106.6%). Pinto
bean return above selected variable cost showed high variability, compared to com
return, as indicated by the coefﬁcients of variation (Figure 5.17). The risk associated
with the high variability in pinto bean returns partly explains the acreage shift from
bean to com production that has occurred in Idaho in recent years.

Figure 5.17 Return Above Selected Variable Cost per Acre for Pinto Bean and Com
in Idaho, 1997-2003

 

 

 

 

 

 

 

 

 

 

250
200
150 i———2:::::3
EJCorn
lPinto

 

 

 

 

0|
0
1

I

 

 

 

 

 

 

O

 

 

 

 

 

 

Return above Selected Variable Cost
(USS/acre)
3
O
1

1997 1999 2001 2003
Source: NASS(2005)

 

' Proﬁtability is measured in terms of Returns above Selected Variable Cost per acre. In the calculation
price, yield, and production cost data were used. Production cost data corresponds to Total Selected
Variable Costs per acre and includes the items listed above. Returns are calculated as (Price‘Yield)-
Production Cost. Due to the limitation on production cost data, returns were calculated only for 1997,
1999, 2001, and 2003.

2 Since the objective of this section is to compare proﬁtability of different crops as a determinant of
planting decision, corn prices include the effect of the U.S. price support program, while pinto bean
prices correspond to market prices. '

146

5.1.2.2 Conclusions

Idaho’s total bean acreage decreased in recent years. The bean acreage
decrease occurred in counties reporting signiﬁcant corn acreage increases. Acreage
shift from pinto bean to corn production can be explained in terms of these crops’
relative proﬁtability and risk. Pinto bean prices show more variability than corn
prices, which increases price risk. Yields have trended upwards for both crops, but
pinto bean yields show more variability. Even though corn production costs have
trended upward, returns above selected variable cost per acre were higher for corn
than for pinto bean production. In three of the four years considered, corn returns
were higher than pinto bean returns. In all years, corn returns were positive, while
pinto returns were negative in 1999. Thus, the risk associated with returns variability
explains the acreage shift from pinto bean to corn production.
5.1.3 North Dakota
Main State Trends

During 1994-2003, North Dakota’s bean acreage was steady at an average of
608,630 acres (Figure 5.18). However, North Dakota pinto bean production increased
by 45,037 Mt, black bean production by 11,289 Mt, great northern bean production
by 5,130 Mt, and “other” beans production by 5,076 Mt. On the other hand, North
Dakota navy bean production decreased by 10,714 Mt. This suggests that either
acreage has shifted from classes showing decrease to classes showing growth or that
production increase and decrease have occurred in different regions of the state,

which explains steady acreage.

147

Figure 5.18 Dry Bean Acreage in North Dakota, 1994-2003

 

 

 

 

 

 

 

 

 

 

 

140 900 ..

f 120+ ‘800 g
g r700 a
g 100- _ F r +600 g-
: 80‘ ~500 3’
3 400 z
*3 6°‘ 5 a
-300 «I

§ 40- 2
c ~200 g
3 2°“ ~100 5
0 ' 7 r 7 O a

 

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

C21 ND +Wells ——+— Benson +Traill -x—Grand Forks

Source: NASS (2005)
Counties with Major Changes in Dry Bean Production

During 1994-2003, North Dakota dry bean acreage decreased slightly from
582,300 acres (mean, 1994-1996) to 582,200 acres (mean, 2001-2003). While North
Dakota’s dry bean acreage changed little over the period, counties such as Wells and
Benson showed a signiﬁcant acreage increase, while counties such as Traill and
Grand Forks showed a large decrease (Table 5 .5). This suggests that growth in dry
bean acreage (pinto, black, great northern, and others) has occurred in different areas
than the decrease in navy bean acreage.

Table 5.5 Dry Bean Acreage in North Dakota, 1994-2003

 

Mean Mean Relative
1994-1996 2001-2003 Aﬂgég‘snge change G'm/i‘fate
County (acres) (acres) (%)
Wells 25,500 51,500 26,000 101.96 10.56
Benson 5,033 25,567 20,533 407.95 26.13
Traill 62,667 33,900 (28,767) (45.90) (8.40)
Grand Forks 119,667 87,000 (32,667) (27.30) (4.45)
ND 582,300 582,200 (100) (0.02) (0.00)

 

Source: NASS (2005).

148

Wells County

During 1994-2003, Wells County’s crop acreage averaged 821,850 acres
(CV=7.3%), which was distributed among spring wheat (27.5%), barley (8.6%),
sunﬂower (6.7%), and dry beans (4.8%). However, total crop acreage decreased at an
annual rate of 1.8%-- from 870,266 acres (mean, 1994-1996) to 858,800 acres (mean,
2001-2003). Shift-share analysis showed that soybeans accounted for 28.9% and dry
beans for 26.3% of the increase in acreage, while spring wheat and wheat durum
accounted for most (51%) of the acreage decrease. In other words, dry bean acreage
increased, while wheat acreage decreased (Figure 5.19).

Figure 5.19 Dry Bean and Wheat Acreage in Wells County, North Dakota, 1994-

 

 

 

 

 

 

 

2003

70 350
A Spri Wheat
3 60 "g A 300 A
8 Dry Beans / \ g
g 50 250 8
3 §
5 40 W WK/‘\§7§‘b 20° 3
3 30 150 8
o
‘0 .____.////"S\\(// \\. .g
5 20 \ 100 g
a t
: //”' a.
a 10 50 a)
(3 Wheat Durum\'/

0 0

 

 

 

1994‘1995,1996]1997119981199912000’2001[2002'2003
Source: NASS (2005)

During 1994-2003, Wells’s dry bean acreage, which averaged 39,050 acres
(CV=34.8%), increased at an annual rate of 10.6% from 25,500 acres (mean, 1994-
1996) to 51,500 acres (mean, 2001-2003). Dry bean’s share of total acreage increased
from 2.9% to 6.7%. On the other hand, while spring wheat acreage averaged 226,300

acres (CV=17.9%), it decreased at an annual rate of 4.2%-- from 273,300 acres to

149

202,600 acres. Durum wheat acreage, which averaged 26,620 acres (CV=49.7%),
decreased at an annual rate of 15.0% «from 35,000 acres to 11,233 acres.
Consequently, spring wheat’s share of total Wells acreage decreased from 31.4% to
26.5%, while durum wheat’s share decreased from 4.0% to 1.5%. Thus, the increase
in bean acres was equal to 27.5% of the decline in wheat acres.
Benson County

During 1994-2003, Benson County’s crop acreage, which averaged 689,840
acres (CV=1 1.3%), which was distributed among spring wheat (19.4%), durum wheat
(12.7%), barley (11.6%), sunflower (4.3%), beans (2%), and others. Total crop
acreage decreased at an annual rate of 3.3%» from 768,833 acres to 607,066 acres.
Shift-share analysis showed that canola, soybeans, and dry beans accounted for most
(61.4%) of the increase in acreage, while durum wheat accounted for most (56.9%) of
the acreage decrease. In other words, dry bean acreage increased, while durum wheat
acreage decreased (Figure 5.20).

Figure 5.20 Dry Bean & Durum Wheat Acreage in Benson County, North Dakota,

 

 

 

 

 

 

 

 

 

 

1994-2003

160

A 140 A

g 120 / \

$.00 \ / \

E 80 \ / \Durum

s v \

3 so

5 .0 \

a Dry Beans %

8 20 W \
0 . a

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: NASS (2005)

150

During 1994-2003, Benson County’s dry bean acreage, which averaged
13,790 acres (CV=69.7%), increased at an annual rate of 26.1%-- from 5,033 acres
(mean, 1994-1996) to 25,566 acres (mean, 2001-2003). Consequently, dry bean’s
share of total acreage increased from 0.7% in 1994-1996 to 4.2% in 2001-2003. On
the other hand, while durum wheat acreage averaged 87,400 acres (CV=53.0%), it
decreased at an annual rate of 20.4%-- from 131,666 acres to 26,666 acres. Durum
wheat’s share of total acreage decreased from 17.1% to 4.4%. Thus, the increase in
dry bean acres was equal to 19.5% of the decline in durum wheat acres.
Traill County

During 1994-2003, Traill County’s crop acreage, which averaged 659,260
acres (CV=7.4%), was distributed among spring wheat (24.2%), soybeans (20.6%),
dry beans (7.9%), and others. Total crop acreage decreased at an annual rate of 2.3%-
- from 703,766 acres (mean, 1994-1996) to 691,733 acres (mean, 2001-2003). Shift-
share analysis showed that barley, wheat, and dry beans accounted for 61.6% of the
acreage decrease, while soybeans accounted for most (73.7%) of the acreage increase.
In other words, dry bean acreage decreased, while soybeans acreage increased (Figure

5.21).

151

Figure 5.21 Dry Bean and Soybean Acreage in Traill County, North Dakota, 1994-
2003

 

250

200 /

Soybeans/\//
1 00 A/‘W
50 - A

Dry Beans V\

0 ﬁ *I 1' ﬁt

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

 

 

 

(1000 acres)

 

 

 

 

Source: NASS (2005)

During 1994-2003, Traill County’s (dry bean acreage, which averaged 51,870
acres (CV=28.6%), decreased at an annual rate of 8.4%-- from 62,666 acres (mean,
1994-1996) to 33,900 acres (mean, 2001-2003). Consequently, dry bean’s share of
total acreage decreased from 8.9% to 5.7%. On the other hand, while soybeans
acreage averaged 135,550 acres (CV=3 7.2%), it increased at an annual rate of 14.1%-
- from 73,833 acres to 118,666 acres. Consequently, soybean’s share of total acreage
increased from 10.5% to 31.1%. Thus, the increase in soybean acres was equal to
391% of the decline in dry bean acres.

Grand Forks County

During 1994-2003, Grand Forks’s crop acreage, which averaged 936,950
acres (CV=8.4%), was distributed among spring wheat (27.2%), dry beans (11.4%),
soybeans (8.6%), and others. Crop acreage decreased at an annual rate of 2.2%-- from
1,008,433 acres (mean, 1994-1996) to 982,966 acres (mean, 2001-2003). Shift-share

analysis showed that barley and dry beans accounted for 66.5% of the acreage

152

decrease, while soybeans accounted for most (75.2%) of the acreage increase. In

other words, dry bean acreage decreased, while soybeans acreage increased (Figure

 

 

 

5.22).
Figure 5.22 Dry Bean & Soybean Acreage in Grand Forks County, North Dakota,
1994-2003

180

160 ff

140

120 A Dry Beans /

 

100 v \———1 A
80- /\ ﬁ/ \\
40 / Soybeans V

V

20

 

 

(1000 acres)

 

 

 

 

 

 

0 I 7 I I I I I T

1994 1995 1996 1997 1998 1999 2000 2001 2002 1 2003
Source: NASS (2005)

During 1994-2003, Grand Forks County’s dry bean acreage, which averaged
107,200 acres (CV=18.4%), decreased at an annual rate of 4.5%-- from 119,666 acres
(mean, 1994-1996) to 87,000 acres (mean, 2001-2003). Dry bean’s share of total
acreage decreased from 11.9% to 10.1%. On the other hand, while soybeans acreage
averaged 80,350 acres (CV=54.1%), it increased at an annual rate of l9.0%-— from
37,500 acres to 126,333 acres.-Soybean’s share of total acreage increased from 3.7%
to 14.6%. Thus, the increase in soybean acres was equal to 272% of the decline in dry
bean acres.

Acreage Trend Summary
Analysis of bean and other crop acreage trends in selected North Dakota

counties, suggests that crop acreage shifted from durum and spring wheat production

153

to dry bean production in the counties that showed dry bean acreage increases. On the
other hand, acreage shifted from dry bean production to soybean production in
counties that showed dry bean acreage decrease. A proﬁtability analysis based on
price, yield, production costs, and return trends follows in order to explain these
acreage shiﬁs.
5.1.3.1 Analysis of the Profitability of Dry Beans and Wheat

As mentioned in the previous section, some counties in North Dakota have
experienced an acreage shift from durum and spring wheat production to dry bean
production. This section compares the proﬁtability of durum, spring wheat, pinto, and
navy beans.
Price Trends

During 1994-2003, durum wheat, spring wheat, and navy bean prices showed
a decreasing trend, while pinto bean prices showed an upward trend. Durum wheat
prices decreased at an annual rate of 5.8%, from USS 5.1/cwt (mean, 1994-1996) to
U.S.S/cwt 3.4 (mean, 2001-2003), spring wheat prices decreased at an annual rate of
3.4%, from USS 4.1/cwt (mean, 1994-1996) to U.S.$ 3.2/cwt (mean, 2001-2003),
and navy bean prices decreased at an annual rate of 1.8%, from U.S.$ 18.8/cwt
(mean, 1994-1996) to U.S.$ 16.5/cwt (mean, 2001-2003). On the other hand, pinto
bean price increased at an annual rate of 0.6%-- from USS 18.7/cwt (mean, 1994-
1996) to U.S.$ 19.6/cwt (mean, 2001-2003).

These price trends are consistent with the increase in pinto bean production
and the decrease in navy bean, durum wheat, and spring wheat production that North

Dakota experienced in recent years (Figure 5.23). It is important to point out that

154

durum wheat and spring wheat are crops included under the government’s price
support program. This section analyzed market price trends, while the effect of U.S.
farm policy is analyzed in the last section of this chapter under U.S. Farm Bill.

Figure 5.23 Navy, Pinto, Durum, & Spring Wheat Prices in North Dakota, 1994-
2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

.. 35 203
Pintobeans J_ '9
E 30 A. 18%
a 16:3,
3 00 14,3,
1:.3 20 NM ANaWbeans \A - 124;
a a
a 1 ,1/1‘l V1 1\ 1 A 10 2
'5 15 I ' ”W m ‘3 E
3 10 Wm :11" _ 6 a
5 “ T” 1 '7‘" . fir—f". ‘$"""' .. . __
5 ?— Springwheat 0" v”?- -t2 5
- f . . . ﬁ f . . 0 a
a a. a a. a 8.: .8 a s 8
é c c C C c c: c: c c
m to m «I m w a a, a: m
'1 '3 '5 -: -, .5 ., .5 a _,

Source: NASS (2005); ERS (2005)
Yield Trends

During 1994-2003, spring wheat, pinto and navy beans yields showed an
increasing trend, while durum wheat yield showed a downward trend. Spring wheat
yield increased at an annual rate of l.5%-- from 30.5 bushel/acre (mean, 1994-1996)
to 33.8 bushel/acre (mean, 2001-2003); pinto bean yield increased at an annual rate of
2.6%- from 1,280 pounds/acre (mean, 1994-1996) to 1,530 pounds/acre (mean,
2001-2003); and navy bean yield increased at an annual rate of l.7%- from 1,403
pounds/acre (mean, 1994-1996) to 1,583 pounds/acre (mean, 2001-2003). On the
other hand, durum wheat yield decreased at an annual rate of 1.0%- from 28.8

bushel/acre (mean, 1994-1996) to 26.8 bushel/acre (mean, 2001-2003).

155

Durum wheat yield averaged 27.2 bushel/acre (CV=12.3%) and spring wheat
yield averaged 31.7 bushel/acre (CV= 13.9%), while pinto bean yield averaged 1,393
pounds/acre (CV= 8.8%) and navy bean yield averaged 1,475 pounds/acre (CV=
6.8%) (Figure 5.24). However, both durum wheat and spring wheat yields showed
more variability than bean yields (as evidenced by a high CV), which indicates
greater production risk.

Figure 5.24 Navy, Pinto, Durum, & Spring Wheat Yield in North Dakota, 1994-2003

 

 

 

 

 

 

 

 

 

E. 1800 Na bea 80 E
vy ns
g 1600 W a 70 g
a 1400 AA -- E
E W V Pinto beans 60 g
& 1200 50 a
'0 1000 ‘5
E Springwheat .. 40 °
% 600 \A My 30 g
"a \Y/ W000. ‘ ,_ ,0 a
g 400 ‘1
“I E
g. 200 "” 10 a
5 8

 

 

 

O

o I I I T I—

1994 1995 1996 1997 1998,1999'2000'2001 20022003
Source: NASS(2005)
Production Cost’ Trends
During 1994-2003, spring wheat, durum wheat, and dry bean selected variable
cost showed an increasing trend. Spring wheat cost increased at an annual rate of
0.4%» from USS 62.4/acre (mean, 1994-1996) to U.S.$ 64.3/acre (mean, 2001-
2003); durum wheat cost increased at an annual rate of 0.02%» from USS 59.6/acre

(mean, 1994-1996) to U.S.$ 59.7/acre (mean, 2001-2003); and dry bean cost

 

' In this section production cost refers to Selected Variable Costs, which are called Listed Direct Costs
in the enterprise budgets by North Dakota State University Extension Service.

156

increased at an annual rate of 3.0%-- from U.S.$ 91.1/acre (mean, 1994-1996) to
U.S.$ 112.2/acre (mean, 2001-2003) (Figure 5.25).

Figure 5.25 Durum, Spring Wheat, & Dry Bean Selected Variable Cost in North
Dakota, 1994-2003

 

 

 

 

N45
00

 

O

f 140

8

a 120

0)

§ 100

a .

8 80 I Spnng Wheat
2 r3 Durum

E 60 t2! Dry beans
‘>'

E

.2

O

U)

’99“ ’99” 96° 96‘ 99% 999' (190° Q0" 66" 4965
Source: NASS(2005)
Spring wheat, durum wheat, and dry bean selected variable cost (Table 5.6)
showed relatively low variability, as evidenced by their CVs. Spring wheat cost
averaged U.S.$ 63.2/acre (CV=3.5%), durum wheat cost averaged U.S.$ 60.7/acre

(CV=3.1%), and dry bean cost averaged U.S.$ 97.7/acre (CV=9.6%).

157

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as a.a a.a v... a.a No a.» v.0 a.a a.a no. new .03“.
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a.a? a.a. Nap a.a? a.~.. a.3 0.3 a.a? 0.2 0.... 62:5“.
a.a? a.a? v.3 o.o.. a9. a.a? a.a. a.a? as 3: 2.30
moon Noam Sow coon aaa. aaa.. naa— oaa. aaar .Vaap 3.83.0.3 $8 50:3 9.50

 

88.52 59.8 532 a. .80 0502$ Begum 53.. on a as...» wanna ease ea 2...;

158

Relative Profitability’ Trends

During 1994-2003, pricez, yield, and production cost trends determined the

relative proﬁtability of pinto and navy beans, compared to durum and spring wheat.

Pinto and navy bean returns above selected variable cost averaged U.S.$ 120.6/acre

(CV=35.1%) for pinto, and U.S.$ 143.5/acre (CV=35.5%) for navy beans. On the

other hand, durum and spring wheat returns above selected variable cost averaged

U.S.$ 44.6/acre (CV=73.9%) for durum, and U.S.$ 47.5/acre (CV=43.8%) for spring

wheat. Durum and spring wheat return above selected variable cost showed high

variability, compared to pinto and navy bean returns, as evidenced by the coefficients

of variation (Figure 5.26).

Figure 5.26 Return Above Selected Variable Cost per Acre for Durum, Spring

Wheat, Pinto, and Navy Bean in North Dakota, 1994-2003

 

300

 

250

 

 

N
O
O

 

 
  

 

Return above Selected Variable
Cost (USS/acne)
8 a:
O O

 

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: NASS(2005)

 

 

 

I Wheat spring
a Dururn
I Pinto

INavy

 

' In this section proﬁtability is measured in terms of Returns above Selected Variable Costs per acre. In
the calculation price, yield, and production cost data were used. Production cost data corresponds to
Total Selected Variable Costs per acre and includes the items listed above. Returns are calculated as

(Price‘Yield)-Production Cost.

2 Since the objective of this section is to compare proﬁtability of different crops as a determinant of
planting decision, durum and spring wheat prices include the effect of the U.S. price support program,

while navy and pinto bean prices correspond to market prices.

159

 

During 1994-2003, spring wheat, durum wheat, and navy bean returns over
selected variable cost showed a decreasing trend. Durum wheat returns showed the
highest decrease rate at 10.8%-- from U.S.$ 83.4/acre (mean, 1994-1996) to U.S.$
37.4/acre (mean, 2001-2003); spring wheat cost decreased at an annual rate of 3.0%--
from U.S.$ 65.6/acre (mean, 1994-1996) to U.S.$ 53.1/acre (mean, 2001-2003); and
navy bean returns decreased at an annual rate of 3.2%-- from U.S.$ 183.7/acre (mean,
1994-1996) to U.S.$ 146.4/acre (mean, 2001-2003). On the other hand, pinto bean
returns increased at an annual rate of 2.9%-- from U.S.$ 126.3/acre (mean, 1994-
1996) to U.S.$ 154.4/acre (mean, 2001-2003) (Figure 5.26).
5.1.3.2 Analysis of the Proﬁtability of Dry Beans and Soybeans

As mentioned previously, some counties in North Dakota have experienced an
acreage shiﬁ from dry bean production to soybean production. This section compares
the proﬁtability of soybeans, pinto, and navy beans.

Price Trends

During 1994-2003, soybean and navy bean prices showed a decreasing trend,
while pinto bean prices showed an upward trend. Soybean price decreased at an
annual rate of 3.3%-- from U.S.$ 6.1/cwt (mean, 1994-1996) to U.S.$ 4.9/cwt (mean,
2001-2003); and navy bean price decreased at an annual rate of 1.8%-- from U.S.$
18.8/cwt (mean, 1994-1996) to U.S.$ 16.5/cwt (mean, 2001-2003). On the other
hand, pinto bean price increased at an annual rate of 0.6%-- from U.S.$ 18.7/cwt to
U.S.$ 19.6/cwt.

However, pinto bean prices showed the highest variability, as evidenced by its

coefﬁcient of variation. Pinto bean price averaged U.S.$ 16.5/cwt (CV=32.4%), navy

160

bean price averaged U.S.$ 16.0/cwt (CV=26.0%), and soybean price averaged U.S.$
5.4/bushel (CV=20.7%). These price trends are consistent with the increase in pinto
bean production and the decrease in navy bean production that North Dakota
experienced in recent years. The soybean production increase can be explained in
terms of less risk (due to lower price and yield variability) and returns, as it will be
shown later (Figure 5.27). It is important to point out that soybeans are included
under the government’s price support program. This section analyzed market price
trends, while the effect of U.S. farm policy is approached in the last section of this
chapter under U.S. Farm Bill.

Figure 5.27 Soybean, Pinto, and Navy Bean Prices in North Dakota, 1994-2003

 

 

 

 

 

 

 

 

 

 

 

 

 

A 35 20
E Pinto beans 18
30 J“ “
g \ l- 16 3
a 25 - 14 3
g 20 m MA ANaw beans \‘A ”- 12 3f
9. l \V ~10 0
3 ’C
c 15 I V‘U v? .. 8 2
'3. i a
'0 10 ”iv ‘vb 6 3
C W >~
a 5 4 o
(I)
5 Soybeans ” 2
' r r r r r r r 0

3. 53 33 S 30 3.3 8 5 3 8

c c r: r: c c c c c r:

as m m m a co to to m a

W W W '7 5 '7 5 5 '5 W

Source: NASS (2005); ERS (2005)
Yield Trends

During 1994-2003, soybeans, pinto and navy beans yields showed an
increasing trend. Soybean yield increased at an annual rate of 1.0%-- from 29.7
bushel/acre (mean, 1994-1996) to 31.8 bushel/acre (mean, 2001-2003); pinto bean

yield increased at an annual rate of 2.6%» from 1,280 pounds/acre (mean, 1994-

161

1996) to 1,530 pounds/acre (mean, 2001-2003); and navy bean yield increased at an
annual rate of 1.7%-- from 1,403 pounds/acre (mean, 1994-1996) to 1,583
pounds/acre (mean, 2001-2003).

Soybeans, pinto, and navy bean yields showed similar variability (as
evidenced by their CVs). Soybean yield averaged 31.3 bushel/acre (CV=6.7%), pinto
bean yield averaged 1,393 pounds/acre (CV= 8.8%), and navy bean yield averaged
1,475 pounds/acre (CV= 6.8%) (Figure 5.28).

Figure 5.28 Soybean, Pinto, and Navy Bean Yield in North Dakota, 1994-2003

 

 

 

 

 

 

 

 

 

.5. 1800 N be 80
. avy ans
1% 1600 M -~ 70 E
1: 1400 - e/k -- 3
§ K V Pinto beans 60 E
0 1200 - g
.9 r 50 g
2 1000 a
.2 Soybean — 40 7;
: 800 W 3
.‘é 600 “ 3° 2'
n ‘1

~ 20 "
g 400 3
“l 3'
;~ 200 “ 10 (a
5 0 . 2 . 0

 

 

 

1994 19951996 19971199811999I2000T2001 [2002 2003
Source: NASS(2005)
Production Cost’ Trends

During 1994-2003, dry bean selected variable cost increased at an annual rate
of 0.9%, from U.S.$/acre 91.1 (mean, 1994-1996) to U.S.$/acre 97.1 (mean, 2001-
2003). Soybean cost increased at an annual rate of 1.9%-- from U.S.$/acre 54.0

(mean, 1994-1996) to U.S.$/acre 61.5 (mean, 2001-2003) (Figure 5.29).

 

' In this section production cost refers to Selected Variable Costs, which are called Listed Direct Costs
in the enterprise budgets by North Dakota State University Extension Service.

162

Dry bean_ selected variable cost showed slightly higher variability than
soybean cost, as evidenced by their CVs. Dry bean cost averaged U.S.$ 97.7/acre
(CV=7.8%), while soybean cost averaged U.S.$ 59.1/acre (CV=6.6%).

Figure 5.29 Soybean, Pinto, and Navy Bean Selected Variable Cost in North Dakota,
1994-2003

 

120
100 ~ a
80 -~
I Soybeans
El Dry beans

.5
O .

N
O

  

Selected Variable Cost (USSIacre)
0)
O

 

 

O
l

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: NASS(2005)

Table 5.7 shows the cost items used in the calculation of production cost:

163

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66 36 o.« «6 66 to, o.» «6 v.« v.« 62.26”.
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o.R 33 6.2 «63 «.9 «.2 o.«. t: «.2 2: Sam
88 «8« 58 ooo« 82 82 RE .82 82 32 22626.02 .68 653%

 

884812022 552 2 :8 63%; e383 562 «:2 es. 62:: 522% «6 use...

164

Relative Proﬁtability] Trends

During 1994-2003, pricez, yield, and production cost trends determined the
relative proﬁtability of pinto and navy beans, compared to soybeans. Pinto bean
returns averaged U.S.$ 121/acre (CV=35.1%), navy bean returns averaged U.S.$
144/acre (CV=35.5%), and soybean return averaged U.S.$ 120/acre (CV=12.6%).
Pinto and navy bean return showed high variability, compared to soybean returns, as
evidenced by the coefﬁcients of variation (Figure 5.30).

Figure 5.30 Return above Selected Variable Cost per Acre for Soybean, Pinto, and
Navy Bean in North Dakota, 1994-2003

 

 

 

 

 

01
O
l

 

 

 

2 300
.D

3 250

II

> A

g E 200 «~

8 a lSoybeans‘
g 3 150 IPinto
° "‘ lNa

3 g 100 W
.n U

N

E

3

at

o - ‘ ‘ .
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Source: NASS (2005)

During 1994-2003, soybean and navy bean returns over selected variable cost
showed a decreasing trend. Soybean returns showed the smallest decrease rate at

0.9%-- from U.S.$ 130.5/acre (mean, 1994-1996) to U.S.$ 122.2/acre (mean, 2001-

 

' In this section proﬁtability is measured in terms of Returns above Selected Variable and Fixed Costs
per acre. In the calculation price, yield, and production cost data were used. Production cost data
corresponds to Total Selected Variable and Fixed Costs per acre and includes the items listed above.
Retums are calculated as (Price‘Yield)-Production Cost.

2 Since the objective of this section is to compare proﬁtability of different crops as a determinant of
planting decision, durum and spring wheat prices include the effect of the U.S. price support program,
while navy and pinto bean prices correspond to market prices.

165

2003) while navy bean returns decreased at an annual rate of 3.2%—- from U.S.$
184/acre (mean, 1994-1996) to U.S.$ 146/acre (mean, 2001-2003) (Figure 5.30).
5.1.3.3 Conclusions

Although, North Dakota’ total bean acreage remained steady in recent years,
counties located in the central region of the state registered signiﬁcant bean acreage
increase, while counties in the eastern region of the state showed shown bean acreage
decrease.

The bean acreage increase largely explains the increase in pinto bean
production, which has occurred in counties reporting signiﬁcant durum and spring
wheat acreage decreases. Acreage shifts from wheat (durum and spring) to dry (pinto)
bean production can be explained in terms of these crops’ relative proﬁtability and
risk. Pinto bean prices have trended upwards, while wheat prices decreased. Durum
and spring wheat yields showed higher variability than pinto and navy bean yields,
which increases production risk. Finally, the combination of price, yield, and
production costs contributed to negative returns over selected variable cost for durum
and spring wheat as compared to pinto and navy bean returns. Therefore, changes in
relative proﬁtability explain the increase in dry bean production and the decrease in
durum and spring wheat production.

The bean acreage decreases resulted in a decrease in navy bean production,
which occurred in counties which reported a signiﬁcant soybean acreage increase.
Acreage shiﬁ from dry bean to soybean production can be explained in terms of these
crops’ relative proﬁtability and risk. Navy bean and soybean prices trended

downwards, but, navy bean price showed more variability, which increased price risk.

166

Yields trended upwards and show similar variability for navy and soybean crop.
Although navy bean production costs trended downward while soybean costs
increased, returns over selected variable cost per acre made soybean more attractive,
compared to navy and pinto beans.

Navy bean returns over selected variable cost per acre were higher than
soybean and pinto bean returns during the last decade. However, navy and pinto bean
returns per acre showed higher variability, which indicates the risk associated with
this enterprise and explains the acreage shift from dry bean to soybean production.
5.2 The U.S. Farm Bill and its Effect on Common Bean Acreage Trends

The U.S. Farm Bill provides price support for commodities such as soybeans,
wheat, and corn, which, according to the analysis of acreage trends, compete with
common beans. The objective of this section is to assess the impact of the U.S. Farm
Bill on the relative proﬁtability of these protected commodities, and therefore the
effect of the policy on common bean acreage shiﬁs.

The U.S. Farm Bill

The U.S. Farm Bill supports the farm sector through price support subsidies.
The 2002 Act of the U.S. Farm Bill introduced direct and counter-cyclical payments,
nonrecourse marketing assistance loans, and loan deﬁciency payments, which are to
some extent modiﬁcations of traditional subsidies. Direct payment is a ﬁxed rate paid
for 85% of the farm’s base acreage and direct payment yield. Counter-cyclical
payment rates, which depend on market prices, increase as market price declines
under speciﬁed levels. It is also pays for 85% of the farm’s base acreage and counter-

cyclical payment yield. Nonrecourse marketing assistance loans meet cash ﬂow needs

167

at harvest time, thereby allowing the farmers to store product instead of selling at
harvest, typically at low prices (USDA, 2005).

The U.S. Farm Bill protects with direct and counter-cyclical payments, and
nonrecourse marketing assistance loans the following commodities: wheat, corn,
grain sorghum, barley, oats, rice, upland cotton, peanuts, soybeans, sunﬂower seed,
canola, safﬂower, ﬂaxseed, rapeseed, mustard seed, crambe, and sesame seed. Other
commodities eligible for nonrecourse marketing assistance loans are extra long staple
cotton, honey, wool, mohair, dry peas, lentils, and small chickpeas. However, this
section analyzes the effect of the Farm Bill on soybeans, corn, and wheat-- the
commodities that the acreage trend analysis identiﬁed as competing with beans.
5.2.1 The Soybean Program

The U.S. Farm Bill protects soybean prices under the Oilseeds program
through direct and counter-cyclical payments. Soybean producers are also eligible for
nonrecourse marketing assistance loans, and loan deﬁciency payments. Table 5.4
shows soybean direct payment, loan rate, and target price.

Currently, direct payment for soybean production equals U.S.$ 0.44/bushel,
which is paid after October 1 of the year that the crop is harvested. Producers may
request an advance of up to 50% of the direct payment after December 1 of the year
before the crop is harvested.

Counter-cyclical payments are made when the effective price -deﬁned as the
direct payment rate plus the higher of the national average farm price or the national
average loan rate— is below the target price. Counter-cyclical payments are paid in

two partial (up to 35% of the projected payment rate after October 1 of the year the

168

crop is harvested and up to 70% after February lof the next calendar year) and a ﬁnal
payment (after the end of the marketing year).

Table 5.8 Soybean loan rate, and target price

 

 

Loan Rate Target Price
n a.

1994 4.92 .

1995 4.92 n.a.
1996 4.97 n.a.
1997 5.26 n.a.
1998 5.26 n.a.
1999 5.26 n.a.
2000 5.26 n.a.
2001 5.26 n.a.
2002 5.26 5.80
2003 5.00 5.80

 

Source: USDA, 2005

The U.S. Farm Bill provides a nine-month nonrecourse marketing assistance
loan for soybean production. This loan meet a farm’s cash ﬂow needs and allows
product storage. It is nonrecourse because the commodity is pledge as collateral and
could be delivered as full settlement of the loan at maturity. Finally, a soybean
producer may receive a loan deﬁciency payment, if he/she decided to forgo the
marketing assistance loan. The loan deﬁciency payment equals the difference
between the loan rate and the loan repayment rate times the quantity of commodity
for which the payment is required.
The Soybean Program and its Effect on Bean Acreage

The analysis of acreage trends showed that soybean production gained acres
from beans (especially navy bean) due to their higher proﬁtability. Acreage shift from
bean to soybean production occurred in Michigan and eastern counties in North
Dakota. The objective of this section is to assess the impact of the U.S. Farm Bill on
soybean proﬁtability and therefore the impact of this policy on explaining the

observed acreage shifts.

169

5.2.1.1 Michigan

Michigan showed soybean acreage growth and a navy bean acreage decrease,

which suggests an acreage shift from navy bean to soybean production. Figure 5.31

shows navy, and soybean gross revenue per acre, as well as the effect of the U.S.

Farm Bill over soybean revenue in Michigan. The T shaped lines indicate the share of

soybean gross revenue that corresponds to program revenue. Due to the lack of

production cost information for the whole period, gross revenue per acre instead of

return per acre is used in the analysis.

Figure 5.31 Navy, and Soybean Gross Revenue per Acre and the Effect of the U.S.

Farm Bill in Michigan, 1994-2003

 

400

 

)
0)
01
O

 

300

 

250
200 -
150 4

Gross revenue (USS/acre

100 - f §§§

 

P—i

—

+—

w g}:

 

Cl
C O
l

 

 

- 1
e —(
. .

_—

)__.‘ :.:.___1

 

 

 

 

 

 

 

 

i-———1

-
. —

 

 

 

:L:'i_i'
y.

 

 

 

 

 

h.
e
>.-|-——1
n

}:-—1 i' :-

..>———1

:6

 

 

 

 

 

 

h—n—ﬁ

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: NASS (2005), USDA (2005).

1994 1995 1996 1997 1998 1999

r

2000 2001 2002 2003

 

 

0 Navy been
[:1 Soybean

 

During the decade 1994-2003, the U.S. Farm Bill accounted for 3.5% of the

total gross revenue of soybean production and signiﬁcantly subsidized soybean crop

in four out of ten years (1998-2001). The U.S. Farm Bill increased average soybean

gross revenue per acre from U.S.$ 201/acre without the policy1 to U.S.$ 209/acre

 

' Economic theory suggests that in the absence of the U.S. Farm Bill and its incentive to plant, soybean
output would decrease. With a shorter soybean supply prices would tend to increase, which would
affect soybean revenue. Therefore, when we refer to the “absence” of the U.S. Farm Bill in this

170

 

with the policy. The policy also signiﬁcantly decreased risk by reducing gross
revenue variability from a coefﬁcient of variation of 18.4% without the policy to
13.8% with the policy. The U.S. Farm Bill also increased the minimum gross revenue
from U.S.$ 134/acre (2001) without the policy to U.S.$ 158/acre (2001) with the
policy. Finally, in the absence of the policy soybean, gross revenue would have
decreased at an annual rate of 2.7%- from U.S.$ ZZZ/acre to U.S.$ 184/acre, while in
the presence of the Farm Bill soybean gross revenue decreased at an annual rate of
2.1% from U.S.$ ZZZ/acre to U.S.$ 192/acre.

During 1994-2003, the U.S. Farm Bill made soybean gross revenue
(U.S.$/acre 209.4) more competitive with navy bean gross revenue (U .S.$/acre
245.9), than it would have been in the absence of the policy. The Farm Bill also
reduced soybean gross revenue variability (coefﬁcient of variation) to 13.8%, which
was one-half of the variability for navy bean (27.1%). Finally, the U.S. Farm Bill
increased the minimum soybean gross revenue to U.S.$/acre 157.8, which was 50%
above navy bean minimum revenue (U .S.$/acre 118.2).
5.2.1.2 North Dakota

Eastern counties in North Dakota showed soybean acreage growth and bean
acreage decreases, which are likely to correspond to navy bean since this market class
reported a production decrease in this state. Figure 5.32 shows pinto, navy, and
soybean returns on selected variable cost, as well as the effect of the U.S. Farm Bill
over soybean returns on selected variable costs in North Dakota. The T shaped lines

indicate the share of soybean returns that corresponds to the program.

 

section, we only have the objective of providing an approximate and hypothetical measure of the
policy impact. In a real scenario in which the U.S. Farm Bill does not exist, prices and therefore returns
would be different to the numbers provided here.

171

Figure 5.32 Pinto, Navy, and Soybean Return on Selected Variable Cost per Acre
and the Effect of the U.S. Farm Bill in North Dakota, 1994—2003

 

 

 

 

 

 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

'5 300
8
O
3 250
H
'5
>.. 200-
2 ProgramRevenue
ﬁg 150, \ EJSoybeans
(33 100 INavy
§ 3:3:
.3 t-:
g 5°“ £33
a 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: NASS (2005), USDA (2005).

During the decade, the U.S. Farm Bill accounted for 10.4% of the total returns
over selected variable cost per acre of soybean production and signiﬁcantly
subsidized soybean crop in ﬁve out of ten years (1998-2002). The U.S. Farm Bill
increased average soybean return over selected variable cost per acre-- from U.S.$
107.6/acre without the policyl to U.S.$ 120.1/acre with the policy. The policy also .
signiﬁcantly decreased risk by reducing return variability from a coefﬁcient of
variation of 24.6% without the policy to 12.5% with the policy. The U.S. Farm Bill
also increased the minimum return over selected variable cost from U.S.$/acre 73.0
(2000) without the policy to U.S.$/acre 101.1 (1998) with the policy.

During 1994-2003, the U.S. Farm Bill made soybean return over selected
variable cost (U.S.$ 120.1/acre) competitive to navy bean return (U .S.$ 143.5/acre)

and pinto bean return (U .S.$ 120.6/acre). The Farm Bill also reduced soybean return

 

' Economic theory suggests that in the absence of the U.S. Farm Bill and its incentive to plant, soybean
output would decrease. With a shorter soybean supply prices would tend to increase, which would
affect soybean revenue. Therefore, when we refer to the “absence” of the U.S. Farm Bill in this
section, we only have the objective of providing an approximate and hypothetical measure of the
policy impact. In a real scenario on which the U.S. Farm Bill does not exist, prices and therefore
returns would be different to the numbers provided here.

172

variability (coefﬁcient of variation) to 12.5%, which is below navy bean (35.5%), and

pinto bean (35.1%). The U.S. Farm Bill also increased the minimum soybean return

over selected variable and ﬁxed cost to U.S.$/acre 101.1, which was higher than for

navy (U .S.$ 74.7/acre) and pinto bean (U .S.$ 81.5/acre).

5.2.2 The Corn Program

The U.S. Farm Bill protects corn prices under the Feed Grains program

through the establishment of direct and counter-cyclical payments. Corn producers

are also eligible for nonrecourse marketing assistance loans, and loan deﬁciency

payments. Table 5.5 shows corn direct payment, loan rate, and target price. Direct

payment, counter-cyclical payments, nonrecourse marketing assistance loans, and

loan deﬁciency payments for corn production are similar to their soybean

counterparts. For a description of these payments, refer to the soybean program

section.

Table 5.9 Corn Direct Payment, Loan Rate, and Target Price

 

 

Direct Payment Loan Rate Target Price
1994 0.570 1.89 2.75
1995 0.000 1.89 2.75
1996 0.251 1.89 n.a.
1997 0.486 1.89 n.a.
1998 0.564 1.89 n.a.
1999 0.726 1.89 n.a.
2000 0.697 1.89 n.a.
2001 0.576 1.89 n.a.
2002 0.280 1.98 2.60
2003 0.280 1.98 2.60

 

Source: USDA, 2005

The Corn Program and its Effect on Bean Acreage Decrease

The analysis of acreage trends showed that com production gained acres from

bean crop (especially pinto bean) in Idaho. Acreage shift from bean to corn

production occurred in Idaho due to changes in proﬁtability. The objective of this

173

section is to assess the impact of the U.S. Farm Bill on corn proﬁtability and therefore
the impact of this policy on explaining the observed acreage shift.
5.2.2.1.] Idaho

Idaho shows corn acreage growth and bean acreage decrease, which suggests
an acreage shiﬁ from pinto bean to corn production. Figure 5.33 shows pinto bean
and corn return over selected variable cost per acre, as well as the effect of the U.S.
Farm Bill over corn return in Idaho. The T shaped lines, which in this case are
negligible, indicate the share of corn return over selected variable cost that
corresponds to program revenue.

Figure 5.33 Pinto Bean and Corn Return on Selected Variable Cost and the Effect of
the U.S. Farm Bill in Idaho, 1997-2003

N
0'!
O

 

200

 

 

 

 

 

150 ~~r3z3zf

 

 

El Corn
I Pinto

 

 

 

 

 

0|
0
l

 

 

 

 

 

 

O

 

 

 

in
o

 

Return above variable cost (USSIacr-e)

1997 1999 2001 2003
Source: NASS (2005), USDA (2005).

During 1997-2003, the U.S. Farm Bill did not affect corn prices and returns
over selected variable cost per acre because corn prices in Idaho were higher than the
target price under the policy. Therefore, the U.S. Farm Bill is not related to the

acreage shift from pinto bean to com.

174

5.2.3 The Wheat Program

The U.S. Farm Bill protects wheat producers through the establishment of
direct and counter-cyclical payments. Wheat producers are also eligible for
nonrecourse marketing assistance loans, and loan deﬁciency payments. Table 5.6
shows wheat direct payment, loan rate, and target price. Direct payment, counter-
cyclical payments, nonrecourse marketing assistance loans, and loan deﬁciency
payments for wheat production are similar to their soybean and corn counterparts. For

a description of these payments, refer to the soybean program section.

 

Table 5.10 Wheat Direct Payment], Loan Rate, and Target Price

 

Direct Payment Loan Rate Target Price

 

1994 0.610 2.58 4.00
1995 0.000 2.58 4.00
1996 0.874 2.58 - n.a.
1997 0.631 2.58 n.a.
1998 0.992 2.58 n.a.
1999 1.274 2.58 n.a.
2000 1.225 2.58 n.a.
2001 1.014 2.58 n.a.
2002 0.520 2.8 3.86
2003 0.520 2.8 3.86

 

Source: USDA, 2005
The Wheat Program and its Effect on Bean Acreage

The analysis of acreage trends showed that common bean production
(particularly pinto bean) gained acres from wheat (durum and spring wheat)
production due to changes in relative proﬁtability in the central region of North
Dakota. The objective of this section is to assess the impact of the U.S. Farm Bill on
wheat proﬁtability in North Dakota and therefore the role of this policy in the

disclosed acreage shift.

 

' Corresponds to Deﬁciency Payment (1994-1995), Production Flexibility Contract Rate (1996-2001),
Direct Payment Rate (2002-2003).

175

5.2.3.1 North Dakota

Counties located in Central North Dakota showed wheat acreage decreases
and bean acreage increases, which likely correspond to pinto bean acreage increases
since this market class reported production increase in this state. Figure 5.34 shows
pinto, navy, durum, and spring wheat returns above selected variable and ﬁxed cost
per acre, as well as the effect of the U.S. Farm Bill over durum and spring wheat
returns in North Dakota. The T shaped lines indicates the share of durum and spring
wheat returns above selected variable and ﬁxed cost per acre that corresponds to the
price support program.
Figure 5.34 Pinto, Navy, Durum, and Spring Wheat Returns Above Selected

Variable and Fixed Cost per Acre and the Effect of the U.S. Farm Bill in North
Dakota, 1994-2003

 

 

 

0 Wheat spring
I Durum

El Pinto

I Naw

 

 

 

 

 

 

 

 

 

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

 

 

Returns over selected variable and
fixed cost (US$Iacre)

Source: NASS (2005), USDA (2005).

During 1994-2003, the U.S. Farm Bill had little effect on spring wheat prices
and returns above selected variable and ﬁxed cost per acre and no effect on durum
prices and returns above selected variable and ﬁxed cost. The U.S. Farm Bill slightly

decreased the negative average spring wheat return per acr -- from U.S.$/acre 34.3

176

 

without the policy1 to U.S.$ -31.5/acre with the policy. In the durum wheat case, the
U.S. Farm Bill didn’t affect price and returns per acre, since the market price was
always higher than the target price.

Although the U.S. Farm Bill had some effect on spring wheat returns above
selected variable and ﬁxed cost per acre, the effect was negligible compared to the
difference in wheat and bean returns. Therefore, the U.S. Farm Bill did not have an
effect on the acreage shift. Rather, the acreage shift from durum and spring wheat to
pinto bean was related to the interaction of yield, production cost, and market prices
in North Dakota.

5.2.4 Conclusions

The soybean program of the U.S. FarmBill signiﬁcantly increased soybean
revenue and return per acre and reduced this crop’s risk in Michigan and North
Dakota. Higher income and lower volatility (risk) made soybean production an
attractive option for farmers, who as a result shifted acres from common bean to
soybean production.

The corn program of the U.S. Farm Bill has no effect on corn prices and
returns per acre in Idaho because Idaho’s corn prices were higher than target prices.
Acreage shift from bean to corn production in Idaho responded to the relative
proﬁtability of corn, which was determined by com yield, production cost, and

market prices.

 

' Economic theory suggests that in the absence of the U.S. Farm Bill and its incentive to plant, wheat
output would decrease. With a shorter wheat supply prices would tend to increase, which would affect
wheat revenue. Therefore, when we refer to the “absence” of the U.S. Farm Bill in this section, we
only have the objective of providing an approximate and hypothetical measure of the policy impact. In
a real scenario on which the U.S. Farm Bill does not exist, prices and therefore returns would be
different to the numbers provided here.

177

The wheat program of the U.S. Farm Bill has little effect on spring wheat
price and returns per acre and no effect on durum wheat prices and returns in North
Dakota. Acreage shift from spring and durum wheat to pinto bean in Central North
Dakota responded to the relative proﬁtability of these crops, which was determined

by yield, production cost, and market prices.

178

CHAPTER SIX

SUMMARY AND CONCLUSIONS

6.1 Summary

The U.S., a leading common bean producer, exports one-third of domestic
output. During the past decade, U.S. common bean exports decreased-- eroding the
U.S.’s international market share. On the other hand, the domestic market for U.S.
common beans has contracted due to increased imports. This study documents export
and import trends at the market class and commercial partner level. It also analyzes
common bean production trends, due to the strong relationship between domestic
production and trade. In the analysis of production trends, substitute crops are
identiﬁed and their proﬁtability assessed. Finally, because proﬁtability drives crop
substitution, the effect of the U.S. Farm Bill on substitute crops’ returns is analyzed.
This study provides the ﬁrst analysis of common bean production, consumption,
export, and import trends at the market class level and the ﬁrst analysis of the effect
of the U.S. Farm Bill on the bean sector.

Chapter Two describes the U.S. common bean industry structure, summarizes
production, consumption, exports, and import trends, and analyzes the relationship
between these trends. This analysis found that common bean production decreased as
a result of decreased production of all the market classes, excluding black beans.
Common bean consumption increased as a result of increased consumption of black,
great northern, and pinto beans. For the trade sector, common bean exports decreased
due to the decline in navy and pinto bean exports and imports increased in each of the

market classes.

179

The analysis of the relationship between production, consumption, exports,
and imports showed a strong relationship between production and export trends. In
particular, decreased navy and pinto bean exports were related to production declines,
given that changes in consumption and imports accounted for only a small share of
the change in total production. Therefore, production trends were analyzed in order to
understand factors that were associated with the export decline.

Chapter Three summarizes export trends at the market class and commercial
partner level. It was found that most of the decrease in navy bean exports was due to a
decrease in exports to United Kingdom. The decrease in pinto bean exports was
related to decreased exports to countries such as Rwanda, Congo, and Liberia, which
were food aid recipients. Mexico was the key partner in pinto bean exports
accounting for most of U.S. exports and shaping the exports curve. Kidney bean
exports decreased slightly mainly due to decreased exports to UK, Italy, and
Mexico. On the other hand, the exports of great northern beans increased due to the
growth in exports to Iraq and Algeria, which are food aid recipients. Finally, black
bean exports increased as a result of increased exports to Mexico.

Due to the importance of Mexico and the UK. as major U.S. export partners,
Chapter Three includes an analysis of trends in these countries. It was found that
Mexico imported beans in order to fulﬁll its deﬁcit between consumption (which was
steady during the last decade) and domestic production (which ﬂuctuated
signiﬁcantly, due to the dependence of Mexico’s bean production on weather

conditions). Although Mexican imports were erratic, the U.S. consistently accounted

180

for almost all of Mexican imports. In the case of the U.K., it was found due to a
market share shift the U.S. lost market shares to Canada.

Chapter Four explores import trends at the market class and commercial
partner level. It was found that U.S. common bean imports increased signiﬁcantly, in
all market classes. Canada, the major U.S. import partner, accounted for most of the
imports and most of the increase in imports. Canada was also the major U.S.
competitor in the export market.

The analysis found that during the decade, Canadian common bean production
averaged only one-ﬁfth of U.S. production. However Canadian production
dramatically increased in recent years-- the period in which U.S. output decreased.
Also, Canadian exports, which account for 80% of domestic production, increased
signiﬁcantly, while U.S. exports have declined. Production and export growth in
Canada was associated with increased bean acreage, particularly in the province of
Manitoba.

Manitoba, which produces mostly navy and pinto beans, showed a dramatic
acreage increase and higher yields than other bean-producing regions in Canada and
the U.S. Several factors contributed to the increase in bean production in Manitoba
including climate change, which increased the length of the frost-free period in the
province. Also, due to closure of the Winnipeg sugar beet plant, farmers shifted
acreage from sugar beets to bean production. Finally, Manitoba beneﬁted from the
grth of handling and processing facilities and the development of varieties adapted

to the province’s growing conditions.

181

In order to analyze the competitiveness of the U.S. and Canadian common
bean industry, an analysis of bean production cost was conducted in Chapter Four. It
was found that U.S. bean industry producers had lower costs than their Canadian
counterpart. However, as Canadian competitiveness increased, the gap between bean
production costs in Canada and the U.S. declined.

Due to the strong relationship between export and production trends, Chapter
Five analyzes the effect of the U.S. Farm Bill on bean production. The analysis
focused on navy and pinto bean production, since these market classes accounted for
most of the decrease in common bean exports and showed a decrease in production.
Cost of production data for Michigan, North Dakota, and Idaho were analyzed, since
most of the navy bean production decrease occurred in Michigan and North Dakota,
and most of the changes in pinto bean production occmred in North Dakota and
Idaho. County-level acreage trend analysis was conducted to identify the crops that
experienced a shift in acres where bean production declined. Proﬁtability analysis
(based on enterprise budget information) was conducted to assess how changes in
relative proﬁtability may have contributed to the acreage shift. Finally, the effect of
the U.S. Farm Bill on the proﬁtability of acreage-competing crops was analyzed to
accept or refute the hypothesis that farm policy related factors contributed to acreage
shifts.

It was found that in Michigan, which accounted for most of the decrease in
navy bean production, acreage shifted from navy bean to soybean production. The
acreage shiﬁ was due to higher proﬁtability and lower risk associated with soybean

production, compared to navy beans. The soybean program of the U.S. Farm Bill

182

increased proﬁtability and reduced risk in soybean production, which therefore
induced the acreage shift. In eastern North Dakota, an acreage shift from navy bean to
soybean production was identiﬁed. The acreage shift was explained in terms of higher
soybean proﬁtability and lower risk, due to the U.S. Farm Bill. Therefore the farm
policy clearly accelerated the acreage shift from navy to soybean production.

In central North Dakota, an acreage shift from durum and spring wheat to
pinto bean production occurred. This acreage shift was a response to better pinto bean
returns compared to durum and spring wheat. As the U.S. Farm Bill had only a
negligible effect on wheat returns, market conditions were responsible for acreage
shift.

In Idaho, an acreage shift from pinto bean to corn production occurred, due to
better returns for com. As the U.S. Farm Bill did not increase com returns, market
conditions were responsible for the acreage shift.

6.2 Conclusions and Policy Recommendations

1) The U.S. common bean industry has a strong position in the Mexican
market, which is extremely important for pinto and black bean exports. U.S. common
bean exports to Mexico will continue to depend on trends in Mexican bean
production, which depends on Mexico’s weather conditions. Due to lower costs of
production in the U.S., the U.S. will likely be able to maintain its leading position in
Mexico after NAFTA opens the market to Canadian competition.

a) The United States Dry Bean Council, as well as state bean organizations,
must pursue funding to boost marketing activities in the Mexican market. A more

intensive campaign to promote the “American bean” brand is needed to consolidate

183

the image of U.S. beans among Mexican consumers. Simplifying export procedures
and logistics is also suggested in order to use the geographical proximity as an
advantage for U.S. beans against Canadian beans. Promotion activities must
strengthen relationships with current key Mexican market players.

b) The United States Dry Bean Council, in collaboration with Research and
Academic Institutions, must continue to monitor and forecast Mexican bean
production. A ﬂuctuation in Mexican bean output, which is mainly related to weather,
greatly impacts U.S. exports and therefore creates instability in the U.S. market.

c) To remain competitive against Canada, state organizations in collaboration
with local universities must continue to conduct research at the market class level to
benchmark U.S. beans against Canadian beans.

2) U.S. common bean exports have decreased mainly as a result of decreased
exports of navy beans, which occurred mainly in the UK. The U.S. position in the
UK. declined to market share shift from the U.S. to Canada. The competitiveness of
the Canadian common bean industry, reﬂected in its reduction in production cost,
suggests that Canada will be able to consolidate its position in the U.K. market.

a) The Michigan Bean Commission and the Michigan Bean Shippers
Association, in cooperation with the United States Dry Bean Council, should procure
new markets for navy beans to compensate for the market share lost in the UK.
against Canadian competition.

b) U.S. Trade Representatives should procure trade agreements to expand
market opportunities for U.S. common beans, particularly with countries that lack of

trade agreements with Canada. Canada currently has trade agreements only with

184

Chile, Costa Rica, Israel, and Mexico, and it is negotiating agreements with Latin and
Central America, Singapore and the European Free Trade Association.

3) The decrease in U.S. navy bean exports is related to decreased production,
which occurred mostly in Michigan and North Dakota. Navy bean production has lost
acreage to soybean production, due to the higher proﬁtability and lower risk
associated with soybean production. The soybean program of the U.S. Farm Bill has
improved soybean returns and risk, which has boosted the acreage shift from navy
bean to soybean production.

a) The United States Dry Bean Council, in collaboration with land grant
universities, should conduct research to evaluate both the possibility of incorporating
common beans into the U.S. Farm Bill and the possibility of modifying other crops’
subsidies —such as soybeans— that are distorting the common bean market.

6.3 Limitations of the study and future research

The main limitation of this study was the level of aggregation at which most
of the bean data are available. Trade data for most commercial partners are not
available at the market class level, which made it difﬁcult to draw speciﬁc
conclusions on market competitors. U.S. acreage data at the market class level are
also limited, which made it difﬁcult to conduct analysis at the market class level in
order to make inferences into market class trends.

Also, due to the enormous number of partners and because this study focused
on the ﬁve most important common bean market classes, it was difﬁcult to carry out

an in-depth analysis for every partner by market class.

185

Finally, food aid databases showed inconsistencies with trade databases,
which made it difﬁcult to formulate speciﬁc conclusions on the role of food aid in
U.S. common bean exports.

The following are some research questions that should be addressed in future
studies:

0 What is the role of U.S. food aid policy and donations on U.S.
common bean exports?

o What are the prospects, beneﬁts, and costs of including common beans
into the U.S. Farm Bill?

0 What is the economic impact of the U.S. Farm Bill on the U.S.
common bean industry?

0 What will happen to U.S. common bean exports to Mexico after
January 2008 when NAFTA will eliminate the restrictions on imports into
Mexico? Will Canada be able to capture U.S. market shares in the Meixican
market?

0 What is the effect of the U.S. Farm Bill on land values and how land

values have impacted the competitiveness of the U.S. common bean industry?

186

APPENDIX

 

 

APPENDIX 1
PRODUCTION
Mean . Mean Mean

Market 1994- cmﬁf'em Share of 1994- 2001- 2:22“: Shift- Growth

Class/State 2003 Vanition total 1996 2003 (MTg) share rate (%)
(MT) (MT) (MT)

Pinto 524,533 14.05% 100.00% 545,996 490,184 (55,812) (1.53)
CD 88,725 29.86% 16.92% 108,688 58,157 (50,530) -50.54% (8.55)
ID 38,250 30.12% 7.29% 50,863 30,312 (20,551) 49.68% (7.13)
NE 58,521 24.92% 11.16% 71,021 57,174 (13,847) -8.44% (3.05)
ND 239,939 19.77% 45.74% 213,713 258,750 45,037 85.74% 2.77
Navy 228,258 34.32% 100.00% 281,283 154,572 (126,711) (8.20)
MI 93,533 59.10% 40.98% 143,767 36,048 (107,719) -89.47% (17.93)
MN 38,218 19.58% 16.74% 34,897 37,122 2,225 37.38% 0.89
ND 82,878 23.89% 36.31% 83,824 73,109 (10,714) 56.33% (1.93)
Kidney 101,410 16.50% 100.00% 108,582 87,698 (20,884) (3.01)
CA 9,684 44.83% 9.55% 14,195 5,009 (9,186) -58.01% (13.83)
NY 12,399 32.09% 12.23% 14,725 9,277 (5,448) -23.51% (6.39)
MN 31,803 18.69% 31.36% 33,369 30,509 (2,860) 31.97% (1.27)
NE 11,999 18.90% 11.83% 10,200 12,349 2,149 36.94% 2.77
G.N. 96,561 14.56% 100.00% 90,876 89,014 (1,861) (0.30)
ID 5,407 33.11% 5.60% 6,023 3,511 (2,512) -28.54% (7.42)
NE 80,871 14.02% 83.75% 75,939 72,867 (3,072) -18.12% (0.59)
CD 486 187.49% 0.50% 1,498 - (1,498) 47.54% (100.00)
KS 395 166.13% 0.41% 984 - (984) -11.51% (100.00)
MN 1,407 63.12% 1.46% 1,740 757 (984) -11.33% (11.22)
WY 4,095 49.89% 4.24% 3,299 2,300 (999) 41.13% (5.02)
MI 3,239 81.08% 3.35% - 3,239 3,239 38.70%
ND 4,790 29.96% 4.96% - 5,130 5,130 61.30%
Black 93,869 47.88% 100.00% 77,437 78,179 742 0.14
ND 16,753 62.06% 17.85% 7,688 18,977 11,289 90.62% 13.78
MI 60,269 50.28% 64.20% 54,934 46,081 (8,853) -75.78% (2.48)
Others 118,746 23.21% 100.00% 119,690 101,205 (18,485) (2.37)
to 27,315 55.44% 23.00% 35,170 13,250 (21,919) -93.76% (13.02)
MI 28,499 37.40% 24.00% 27,543 20,662 (6,880) -14.94% (4.02)
KA 2,171 96.18% 1.83% 1,074 3,530 2,456 14.91% 18.52
CO 4,107 94.67% 3.46% 863 5,610 4,748 27.75% 30.67
ND 2,154 145.90% 1.81% - 5,076 5,076 28.87%

 

187

APPENDIX 2

 

 

EXPORTS
Mean Coeﬁcient Mean Mean Absolute .
Country 1994- of 512;“ 1994- 2001- change Sh"; 3%?
2003 (MT) Variation 1996 (MT) 2003 (MT) (MT)

Navy 89,406 18.7% 93,041 69,727 (23,314) (4.0)
UK 51,099 33.0% 57.2% 57,078 34,866 (22,212) -37.9% (6.8)
Algeria 2,927 204.8% 3.3% 9,399 67 (9,332) -33.5% (50.6)
Bosnia 1,639 160.6% 1.8% 3,072 - (3,072) -11.0% (100.0)
Italy 6,580 57.7% 7.4% 5,506 2,818 (2,688) -6.3% (9.1)
Mexico 6,311 65.3% 7.1 % 5,280 9,239 3,959 25.3% 8.3
Canada 7,162 85.0% 8.0% 1,672 9,730 8,058 40.7% 28.6
Pinto 84,974 24.3% 97,481 74,465 (23,015) (3.8)
Rwanda 4,102 154.8% 4.8% 10,612 1,611 (9,001) -25.3% (23.6)
Congo 1,888 299.1% 2.2% 6,130 - (6,130) -18.2% (100.0)
Liberia 1,596 150.8% 1.9% 4,653 - (4,653) -13.8% (100.0)
Algeria 755 209.1% 0.9% 2,515 - (2,515) -7.5% (100.0)
Bosnia 1,021 162.6% 1.2% 2,058 - (2,058) -6.1% (100.0)
Angola 8,304 52.6% 9.8% 11,655 7,354 (4,301) -6.0% (6.4)
Mozamb 2,055 224.8% 2.4% 942 4,997 4,056 16.7% 26.9
Mexico 26,241 71.8% 30.9% 24,058 18,617 (5,441) 0.9% (3.6)
Haiti 16,879 32.3% 19.9% 13,759 17,045 3,286 25.4% 3.1
Dom Rep 6,618 62.9% 7.8% 2,629 9,730 7,100 30.1% 20.6
Black 25,897 46.7% 16,301 33,075 16,773 12.7
Mexico 19,196 59.2% 74.1% 10,876 25,184 14,308 47.7% 23.9
Guatem 1,742 76.4% 6.7% 723 3,243 2,520 27.2% 42.7
Costa R 859 214.9% 3.3% 57 681 624 8.7% (47.3)
Brazil 544 125.2% 2.1% 1,069 12 (1,057) -33.0% (19.7)
Venezuela 959 145.3% 3.7% 1,731 373 (1,357) -48.0% 5.9
G.N. 39,716 24.8% 29,013 43,307 14,294

Iraq 7,822 169.4% 19.7% - 10,071 10,071 44.3% 58.4
Algeria 6,154 100.0% 15.5% 418 10,443 10,025 43.2% (8.7)
Japan 2,076 31.9% 5.2% 2,510 1,330 (1,180) -10.6% (5.5)
France 6,490 44.4% 16.3% 8,605 5,793 (2,812) -31.0%
Kidney 61,551 27.1% 56,787 49,287 (7,500) (23.0)
UK 4,382 65.3% 7.1% 7,871 1,259 (6,612) -56.9% (12.9)
Italy 4,079 53.2% 6.6% 5,775 2,202 (3,572) -28.7% (100.0)
Georgia 593 144.1% 1.0% 1,657 - (1,657) -14.7% (2.7)
Mexico 22,902 70.5% 37.2% 17,930 14,824 (3,106) -7.5% 6.1
Canada 6,179 51 .4% 10.0% 4,337 6,573 2,237 28.7%

 

188

APPENDIX 3

 

 

IMPORTS
Mean . Mean Mean Absolute .
Coeﬁcrent Share of 1994- Shift— Growth
Country 1 994- . . 2001-2003 change h te
2003 (MT) of Variation total 1996 (MT) (MT) 5 are ra
(MT) (%L
Pinto 7,695 53.7% 10.8% 4,295 10,886 6,591 -37.9% 14.2
Canada 7,041 64.8% 91.5% 2,990 10,207 7,217 89.6% 19.2
Mexico 407 195.6% 5.3% 1,135 51 (1,084) -96.3% (35.7)
Navy 7,21 8 80.1 % 1 0.2% 3,032 14,057 1 1 .025 16.2% 24.5
Ethiopia 49 316.2% 0.7% - 162 162 62.1%
China 29 103.8% 0.4% - 45 45 17.2%
El Salvador 11 312.0% 0.2% - 37 37 14.3%
Chile 5 315.1% 0.1 % 18 0 (18) -31.4% (55.9)
Canada 7,101 79.9% 98.4% 2,995 13,788 10,793 -36.1% 24.4
G.N. 326 1 17.2% 0.5% 1 28 440 312 -0.4% 19.3
Canada 190 153.8% 58.4% 35 41 1 376 98.1% 42.5
China 28 133.8% 8.7% 46 22 (24) -46.1% (10.0)
Kidney 1 0,785 74.0% 1 5.2% 6,794 20,822 14,028 -35.6% 17.4
Mexico 2,072 131.7% 19.2% 383 5,107 4,724 69.8% 44.8
El Salvador 940 60.5% 8.7% 337 1,614 1,276 10.3% 25.1
Nicaragua 242 141.5% 2.2% 13 515 502 8.4% 68.6
China 751 74.8% 7.0% 979 949 (30) -36.4% (0.4)
Canada 6,113 68.0% 56.7% 4,647 11,464 6,817 49.3% 13.8
Black 6,456 1 36.7% 9.1% 1 ,1 62 1 6,543 1 5,381 81 .5% 46.1
China 2,091 174.2% 32.4% 226 6,245 6,019 38.3% 60.6
Argentina 763 280.3% 1 1 .8% - 2,446 2,446 31.0%
Canada 2,423 98.8% 37.5% 312 5,515 5,203 13.6% 50.7
Guatemala 32 176.7% 0.5% 93 4 (89) -16.8% (36.0)
India 273 43.5% 4.2% 144 386 242 -21.0°/o 15.2
Mexico 153 77.9% 2.4% 147 51 (96) -25.9°/o (14.1)
Nesoi 33,960 70.1 % 47.8% 17,1 57 66,260 49.1 03 2.3% 21.3
Canada 27,340 77.6% 80.5% 12,498 56,222 43,724 78.9% 24.0
Peru 723 148.6% 2.1% 120 2,082 1,962 16.1% 50.3
India 883 24.5% 2.6% 693 1,003 311 -16.6% 5.4
Mexico 2,495 62.9% 7.3% 2,087 3,373 1,286 46.5% 7.1
Other 4,630 42.8% 6.5% 2,772 6,782 4,01 0 -26.1 % 1 3.6
Total 71 ,070 66.9% 1 00.0% 35,341 135,790 1 00,449 0.0% 21 .2

 

189

APPENDIX 4
FIRMS IN THE U.S. COMMON BEAN INDUSTRY

 

Company

21st Century Bean Processing, LLC
ADM Edible Bean Specialities
BAMP Marketing and Consulting Inc.
Camex, Inc

Colusa lntemational Commodities, Inc.

Colusa Produce Corp

Commodity Specialists Company
ConAgra Foods Inc/KBC Trading &
Processing

Cooperative Elevator Company
Cornerstone Commodities, LLC
CoStar Bean Marketing

EP lntemational Corp

Farmers Finest Bean Company, Inc
Fitz Trading Company, Inc

G.F. Bean Company, LLC

Global Merchandising Corp
Horizon AgCo, Inc

Jack's Bean Company, LLC
Johnston Bean Company

Kelley Bean Company

Kirkeides Northland Bean Company
L.H. Virkler 8. Co., Inc

Larson Grain Company

MayPort Farmers Coop., Edible Bean
Division

Nebraska Dry Bean Associates, Inc
New York Bean, LLC

North Central Commodities
Northern Feed 8 Bean

P.W. Montgomery, Inc

PL lntemational, LLC

SKE Midwestern, Inc

Slauson Trading Company, LLC
Star of the West

Steele 8. Company

The Rice Company

Trinidad Benham Corp

Valley Bean 8. Grain Co., Inc
Western Tradiﬂ Company

190

Type of company

Processor/Shipper

Exporter/Processor/Shipper

Trader

Broker

Exporter/Processor/Shipper
Exporter/GrowerlPackager/‘i’rader/ProcessorlShipper
Exporter/Processor/Shipper

Exporter/Processor/Shipper
Processor/Shipper

Exporter/Packager

Shipper
Exporter/Packager/ProcessorlShipper
Processor/Shipper
Exporter/Broker/Processor/Shipper
Processor/Shipper

Exporter

Exporter
Exporter/Packager/Grower/ProcessorlShippper
Exporter/Grower/Processor/Shipper
Exporter/PackagerlProcessor/Shipper
Processor/Shipper

Processor/Shipper

Processor/Shipper

Processor/Shipper
Exporter/Packager/Grower/Processor/Shippper
Processor/Shipper
Exporter/ProcessorlShipper
Processor/Shipper
Exporter/Broker

Broker

Processor/Shipper
Exporter/Broker
Processor/Shipper
Exporter/ProcessorlShipper
Exporter/Processor/Shipper
Exporter/Packager/Processor
Grower/Processor/Shipper
Exporter/Processor/Shipper

APPENDIX 5

FIRMS IN THE U.S. COMMON BEAN INDUSTRY

 

 

Market Class
Company Pinto Navy Black Great Kidngy
21st Century Bean Processing, LLC Yes
ADM Edible Bean Specialities Yes Yes Yes Yes Yes
BAMP Marketing and Consulting Inc. Yes Yes Yes
Camex, Inc Yes Yes Yes
Colusa International Commodities, Inc. Yes Yes
Colusa Produce Corp Yes Yes Yes
Commodity Specialists Company Yes Yes Yes
ConAgra Foods Inc/KBC Trading 8
Processing Yes Yes Yes Yes Yes
Cooperative Elevator Company Yes Yes Yes Yes Yes
Cornerstone Commodities, LLC Yes Yes Yes Yes Yes
CoStar Bean Marketing Yes Yes Yes Yes
EP International Corp Yes Yes
Farmers Finest Bean Company, Inc Yes
Fitz Trading Company, Inc Yes
G.F. Bean Company, LLC Yes
Global Merchandising Corp Yes Yes Yes Yes
Horizon AgCo, Inc , Yes Yes
Jack's Bean Company, LLC Yes Yes
Johnston Bean Company Yes Yes
Kelley Bean Company Yes Yes Yes
Kirkeides Northland Bean Company Yes
L.H. Virkler 8 Co., Inc Yes Yes Yes Yes
Larson Grain Company Yes Yes
MayPort Farmers Coop., Edible Bean
Division Yes Yes
Nebraska Dry Bean Associates, Inc Yes Yes
New York Bean, LLC Yes Yes
North Central Commodities Yes Yes
Northern Feed 8 Bean Yes Yes
P.W. Montgomery, Inc Yes Yes
PL International, LLC Yes Yes Yes
SKE Midwestern, Inc Yes Yes Yes
Slauson Trading Company, LLC Yes Yes Yes
Star of the West Yes Yes Yes
Steele 8 Company Yes Yes Yes
The Rice Company Yes Yes Yes
Trinidad Benham Corp Yes Yes
Valley Bean 8 Grain Co., Inc Yes Yes
Western Trading Company Yes Yes

 

191

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