Nature's Finest Foods, Ltd.

Specializing in the markteting of tree nuts.

A number of years ago, while attending a meeting of the National Pecan Sheller’s Association, I happened upon a large group of shellers who were complaining about high inshell prices.  Several times during the conversation, the discussion became rather heated.  At the prices they were being forced to pay, how would the industry be able to come up with enough money to buy the crop?  How would they be able to market them?  After all, the market had never reached such levels.  Surely the industry would suffer significant losses.  As I stood there and listened, Nick Sachs, one of the most market savvy and statistically knowledgeable brokers in the history of our industry, walked over and asked, “Did anyone hold a gun to your head?”   The conversation stopped.  You could have heard a pin drop.  Having made his point, Nick turned and walked away.

Why do I mention this?  I do so, not to create controversy, although I’m sure my remarks will, but to remind the Shellers that no one is holding a gun to their heads.  Growers do not market, they sell, and while that is changing with the creation of the new American Pecan Council, such a change will require a major paradigm shift in the pecan industry.  The days of growers ‘selling’ and sheller’s ‘marketing’ needs to come to an end.  Based on current supply figures, there is no reason to be paying $5.00 per point for natives, or even more for improved varieties.  However, if the Sheller’s decide to do so, then they have no one to blame should the market fall and they lose money.  It may sound like an over-simplification, but either quit paying the high prices or figure out a better way to market the shelled kernels.  Yes, there are still a couple of new players who still haven’t figured out that you can make money while not operating their plants at full capacity, and yes, they need to have pecans to operate their plants.  But until the needed paradigm shift occurs, the Sheller’s need to adapt to the changing market dynamics and show more restraint.

As mentioned earlier, based on currently available information, there are more than enough pecans to handle projected consumption.  On Monday, South Africa reported that they had harvested a record crop: over 36 million pounds.  Of that, over 29 million pounds was shipped to China; another record.  A week ago, Mexico reported that they expected to harvest approximately 250 million pounds.  Based on historical data, that would mean that approximately 160 million pounds (net) will come to the US.  Assuming consumption similar to 2016, the supply situation shapes up as follows:

2017 Carry-In (assumes 50% meat conversion)                           140,629,000

2017 USDA Estimate (8 Largest States)                                         277,400,000

2017 Net Mexican Imports (NFF net estimate)                            160,000,000

2017 Total (estimate)                                                                        578,029,000

Minus Consumption (assumes 2016 rates)                                    471,328,000                       

2018 Carry-in (estimate-assumes 50% meat conversion)           106,701,000*

*Note: If using the traditional 44% meat conversation rate, carry-in is 125,020,000 (net)

As of October 30th, the industry had over 10 million more pounds of meats in cold storage than they did a year ago. The USDA estimate left out the production of seven states.  Almonds and Walnuts are priced almost $2.00/lb cheaper than pecans.  So, who’s really holding a gun to their heads?

This website contains only pecan related statistics. For statistical information on other tree nuts, click the appropriate link(s) above.