USDA Releases December Cold Storage Data-Record Inventories & Record Prices

As the harvest slowly concludes in both Mexico and the US, demand continues to be good. As expected, exports to China were good through November; up approximately 40% over the same period a year ago.  Further, overall exports were also up.  However, all of the increase can be attributed to China.  What was most interesting in the FAS data released earlier this month was the large amount of meats shipped to China in both October and November.  One possible explanation; our crop was late and Chinese traders needed meats to satisfy their retail and ingredient users.  Why would this show-up now? For years it has been known that some of the inshell shipped to China was being shelled and sold into the market as meats.  With no large quantities of readily available inshell in either October or November, the Chinese purchased shelled product to satisfy that growing meat segment of their market.  With more and more Chinese consumers developing a taste for pecans as an ingredient, this is a segment of the Chinese market that needs to be nurtured.

With yesterday’s release of the December Cold Storage figures, it should now be clear that the industry has enough pecans to handle anticipated demand.  Overall supplies increased almost 62 million pounds (inshell basis) over the previous month and 23.5 million pounds over December 2015.  While some within the industry like to cast doubts on the veracity of any US Government pecan data, the process used to collect and evaluate the Cold Storage data before it is published is one of the best.  While there is still no way to determine how much of that inventory is committed, a situation that should change once the new American Pecan Council starts collecting and publishing such data, industry nay-sayers should be careful with their criticism.  The pecan industry has a habit of believing its own lies.  Now is not the time to do so.