Pecan Consumption Continues at Record Pace
May 14, 2021
On May 5, 2021, the USDA released their final estimate of the 2020 pecan crop. Based on their data, the 2020 crop came in at 305.36 million pounds (inshell basis). Using NASS cold storage data, as well as APC inventory figures, the extrapolated supply situation shapes up as follows:
|
|
2019 Crop Year |
2020 crop Year (est.) |
|
Carry-In |
181,881,000 |
201,470,000 |
|
US Crop |
255,600,000 |
305,360,000 |
|
Mexican Imports |
300,239,183 |
232,385,000 |
|
Total Supply |
737,720,183 |
739,215,000 |
|
Carry-Out |
201,470,000 |
170,000,000 |
|
Consumption |
536,250,183 |
569,215,000 |
NOTE: Assumes a 50% meat to inshell conversion rate. The US crop estimate is the USDA’s estimate for the five largest producing states.
Should consumption continue at its current pace, it will be the largest in the history of the industry. Further, actual product in inventory on October 1st would be the lowest since 2018. Based on APC figures, committed inventory is 25.7 million pounds greater than a year ago while total inventory held by handlers is down 11 million pounds. Other than 2016, days of available supply is the lowest it has been in ten years.
So what does it all mean? While meat prices have been slowly firming, current pricing is not in line with current supply. This is primarily due to one large Mexican/US Sheller who continues to sell product, particularly pieces, below industry cost. This is not new, but until the rest of the industry decides to ignore his pricing and sell their product based on current supply and costs, the industry will continue to hemorrhage money. Golden Peanut’s announcement that they will be exiting the pecan industry at the end of July should be a wake-up call. Fewer shellers equates to fewer options for both the growers and the buyers. It also means more opportunities for a shelling industry that is desperate to emerge from four years of losses. The big question; will the industry learn from its past or repeat it?
