With its zero carry-over this fall, the California blackeye bean industry is in prime position for a proactive approach in marketing the 2006 crop for better grower returns in the future, says an industry leader.
Paul Paulin, manager of Cal Bean and Grain Warehouse, Pixley, Calif., is looking for a crop of about 275,000 hundredweight – about 50,000 hundredweight more than 2005 – from the state, which contributes about half the U.S. output.
He told growers at a recent field day at Shafter, Calif., that prices of $38 to $40 a sack were holding as the last of the 2005 crop was shipped out during September.
Exhausting the stocks broke a three-year streak of surpluses that held prices so low that many growers stopped growing blackeyes. Blackeye acreage in California this year is about 10,000 acres.
But Paulin warned that if growers are lured by higher prices this crop year and plant more in 2007, they could tip the industry’s supply-demand balance.
He said the United States can absorb about 600,000 sacks year in, year out, but not 800,000. In fact, a 50,000-sack surplus can push down the price. So, he added, growers need to moderate production to keep a profitable margin.
His cooperative, established in 1959 and better known as “Cal-Bean,” typically markets 60 percent to 65 percent of the California blackeye production, which is concentrated in Tulare and Kern counties.
“Part of our plan the last three years,” Paulin said, “has been to basically dry up this market and start a proactive campaign to get end-users to understand the realities of what it costs California growers to be successful with blackeyes and continue to grow the crop.”
Depressed prices at $28 or less a sack, he said, not only hurt growers but also Cal-Bean and other warehouses trying to keep their own overhead down. Paulin figures the break-even for growers is about $30 a sack at 30 sacks to the acre.
In pursuing the plan, he said, Cal-Bean is now courting more direct sales to canners and other end-users. “We are not trying to eliminate all brokers, but we’d like to see a slow movement toward direct sales. We have to convince end users that the guys growing the beans have to make money, and we believe the end-users are starting to come around to our point-of-view.”
Cheap, inferior quality blackeye imports from nations such as Belize influence the world market, but Paulin said they may not be as cheap as some believe, considering costs of shipping them to the United States. Foreign stocks often must be blended with California beans to bring quality to a marketable level.
Growers in the southern San Joaquin Valley enjoy a longtime reputation of being a reliable source of top quality product for the dry bean industry, he said.
“There’s no other place that can guarantee the end-users a supply, so they need to book blackeyes with us in advance at a structure, or level, that is economical to our growers. We want to market ourselves as a consistent supply.”
Blackeye producers in Texas, still smarting from their own series of seasons of surpluses and depressed prices, agree with the California movement. “We’ve started communication with them, and they understand that none of us can afford to overproduce.”
Allowing that Texas blackeyes are cheaper and cannot match California quality, Paulin said, “That’s OK, but we want them up to a trade level where their price supports California’s.”
Paulin urged growers not to be preoccupied with good prices and delay harvest until fall rains threaten, even as the crop continued to set more beans in September. “They’re worth a lot more this year, but get them in the barn sooner than later. With the high price of propane, if you get them wet you can’t afford to dry them.”
Paulin said veteran bean marketer Gary Burnett, who recently joined Cal-Bean to head up the marketing campaign, was hired in the process to replace the broker level. Part of the co-op’s strategy is to market multiple varieties of dry beans.
Burnett said Peruvian blackeyes landed on the East Coast at $40 are cheaper this season than California product because of the $8 to $12 in freight to the east.
He estimated that the 2006 California crop would open at $36 to $38, with many growers having contracts, and said that he expected the price to hold for at least 30 days.
Burnett said he recently negotiated contracts between Cal-Bean blackeye-grower members and major-league bean canner Bush Brothers & Company of Knoxville, Tenn., which takes California blackeye shipments year-round.
Many blackeye canners, he said, are still accustomed to dealing through brokers and plan to stay that way, but, as brokers leave the business for one reason or another over time, Cal-Bean will press for direct marketing. He added that 80 percent of Cal-Bean’s garbanzos are now direct marketed.
Blake Sanden, Kern County farm advisor, was also on hand for the field day and gave some pointers for growers based on his irrigation trial on blackeyes planted in Wasco sandy loam soil at the station this year.
By the second week of August, he said, area growers had been irrigating their beans about once a week since June to make sure they had plenty of stored soil moisture during the spate of three-digit temperatures in July.
Sanden said this year he had seen no bean field that had cut out, even though in a typical year several have begun to cut out by early August.
“I can’t be certain, but it seems to me, with all the heat, everybody got really nervous and compressed their irrigation schedules. The result was they forestalled depletion of moisture down to 6 feet and prevented loss of the stand.”
By checking for deep moisture, he added, growers may find it’s better to run 12-hour sets every four or five days instead of depending on a 24-hour run every 10 days.
With less-frequent irrigations, the Wasco sandy loam at that point in the season characteristically will absorb water only within the top foot. Meanwhile, the lower moisture profile, which supplies blackeye roots that reach down to five or 6 feet, is depleted.