Spend Matters welcomes this guest post from Liliana Gonzalez of Mintec.
A few years ago Fox News ran an article on the 9 best canned foods. We can all name a few products that would be on that list: salmon, tuna, tomatoes, mackerel and beans, however, there were a couple on the list that were a little more obscure. The 2 I did not expect were canned chicken and canned clams. But reading the article I can understand why they are on the list.
Being a British company, it would be wrong of us not to pick beans from this list. In the UK, beans are the staple food of college students, and they been around since the late 19th century. Although the origins are shrouded in mystery, many believe that the canned beans we eat today are adapted from a North American Indian recipe. Others believe that they are adapted from the French dish Cassoulet. Wherever the start, canned beans have become synonymous with many worldwide diets.
The cost of US canned beans has fallen 13% in the past few months. To understand why, we first need to understand what is in a can of beans. Canned beans are generally made up of approximately 60% navy beans, a type of dry bean, and about 35% tomato concentrate with the rest being water, sweeteners and flavoring.
Why have prices fallen so much? Well, it’s mostly down to the beans themselves. The price of navy beans has fallen from just over 80 cents per kg (1kg = 2.2 lbs) in August to around 50 cents per kg at the end of October. This is a result of a 23% year-on-year increase in planted area of total dry beans in the US, reaching 1.67 million acres. The acreage of navy beans themselves is estimated to rise by as much as 43% in 2014. This extra acreage, coupled with good growing conditions, has led to higher volumes of navy beans harvested this season.
The reason behind the sharp increase in acreage is due to farmers reacting to the rising prices of dry beans throughout 2013. The prices of many other dry beans have remained high due to drought and therefore acreage could continue to grow in 2015. Which in turn, could mean that navy bean prices may fall further next year.
With tomato concentrate, there is also good news. Despite the drought conditions in California, contracted volumes for processing tomatoes are forecast up 17% y-o-y and the volumes of US tomatoes used in the processing industry are up 18% y-o-y. This higher demand has resulted in prices for tomato concentrate rising steadily for the past 2 years. However, the increased production has caused prices to start falling. Although currently only down 3% y-o-y, tomato concentrate prices are down 11% from the peak reached in March 2014.
So with prices falling, it’s a good time to be a student!