Record Supply does not necessarily lead to lower prices

July 10, 2008


Although the USDA did not calculate the 2007 crop to be as large as many had anticipated (or believe it to have been), the final figure of 385.3 million inshell pounds made this the second largest crop ever.  Based on current FAS import/export data, 2007/2008 total supply shapes up as follows:

2007 Carryout (9/30) 75,298,500
2007 US Crop 385,305,000
2007 Mexican Imports (estimate**) 105,000,000
2007/2008 Total Supply (estimate) 556,603,500

** The Mexican Import figure is estimated based on FAS Mexico import figures less US inshell export data.

While this is the largest total supply ever for the industry, high priced Walnuts, the weak dollar and heavy overseas exports, especially to China, have kept Pecan prices very firm.  Further, due to the large size of the crop, and the poor quality of the Western crop, Mammoth, Jr. Mammoth and Jumbo Halves, as well as Extra Large and Large Pieces, are in very short supply.  Assuming that consumption is running over 400 million pounds, there should be plenty of Pecans to handle the bulk of the fall business.


The Almond Board released their objective crop estimate last week estimating the 2008 crop at 1.5 billion pounds based on 660,000 bearing acres.  With June shipments setting another record, prices continue to remain firm.  Even though 2008 is projected to be another record crop year, due to the severe water shortage in California, buyers should not expect to see weaker prices as growers prepare for the possibility that unless the water situation changes dramatically in the next 6 months, they may have to treat this crop as the bulk of their supply for the next two seasons. As with last year, kernel sizing will again be an issue with large sizes, of all varieties, being in short supply.


Supplies continue to be extremely tight.  Even though prices have moderated over the past few weeks, they are still well above $4.00/lb.  Early estimates put the 2008 crop around 365 to 370,000 tons which should lead to significantly lower new crop prices. However, there is little carryover from the 2007 crop, and like the Almond industry, the water problem may force many growers to view this crop as a two year supply.