Pecan Market Update
February 23, 2012
On Tuesday the National Pecan Sheller's Association released their best guestimate of the 2011 Pecan crop estimating the crop to be 280.5 million pounds (inshell basis). That figure is slightly higher than the October USDA estimate of 251.7 million pounds but is within reason considering that Georgia appears to have produced about 20 to 30 million pounds more than originally anticipated. If so, and with the larger Mexican crop, it would appear that total supply will be only slightly less than last year. Because most contracts were written at levels below those of last year, consumption should remain strong with China expected to consume about 25% more product than they did in 2011. Even so, unless the March USDA crop estimate comes out considerably smaller than expected, the industry should have enough Pecans to get well into the fall.
With respect to the erroneous 2011 FAS import and export figures (2010 Crop Year), the industry will be focusing its attention on getting the US Census Bureau & FAS to correct all of the erroneous data and then publish it in a user friendly format (The Census Bureau provides FAS with the data. FAS publishes it). At present, FAS has only published the corrections for the top importing countries, by country by month, and has indicated a lack of interest in correcting the data for all of 2010 and for every country that imported Pecans. Further, anyone using their website's drop-down tables to get 2010 crop year data will continue to be given the wrong data unless the industry can get FAS to fix the problem. It is important to understand that NONE of the 2011 FAS import or export data for Pecans is correct. The following are just a few of the errors:
1. Total Pecan exports were originally reported showing an increase of 24%. The corrected figures show that total Pecan exports actually decreased by 28%.
2. Total pounds exported, expressed on an inshell basis, were originally reported to be approximately 225 million pounds. The corrected figure is less than 118 million pounds.
3. Exports to China (including Hong Kong, China and Vietnam), expressed on an inshell basis, were originally reported to be 63 million pounds. The corrected figure was less than 44 million pounds.
4. Inshell Pecan exports to Mexico were originally reported to be 51 million pounds. The corrected figure was less than 28 million pounds.
5. Total imports from Mexico, expressed on an inshell basis, were originally reported to be approximately 210 million pounds. The actual figure was approximately 132 million pounds.
6. The average price paid by China (incl: Hong Kong, China & Vietnam) was originally published as $1.57/lb. The corrected average price was $2.32/lb
7. Of the data currently corrected, none of the errors were found to be under stated. All of the data was overstated. The average error for all of the 2010 data was over 85%.
8. To date, Census Bureau has not corrected any of the pricing errors relative to the price paid for Pecan meats. Their data still shows prices being paid well below $4.00/lb when actual meat prices over the last 18 months have not been less than $6.00/lb and at one point got as high as $7.50/lb for Jr Mammoth Halves.
The above errors have cost both Sheller's and Growers millions of dollars by creating an initial market price considerably higher than it should have been. This artificially high initial price then led to a larger price drop in the field, later in the harvest, than should have been experienced. While the Census Bureau has admitted to making the aforementioned errors, they will not explain how they occurred or what has been done to insure that the problem will not happen again. Hopefully the industry can come together to get some satisfactory answers.
As usual, should you have any questions, please do not hesitate to contact me at 630-377-2628.