Nature's Finest Foods, Ltd.

Specializing in the markteting of tree nuts.

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04/17/13

There were no surprises in last week’s release of the February import/export figures by the Foreign Ag Statistics Service.  Based on the FAS figures, and as expected, exports to China set a new record.  Between August 1, 2012 and February 28, 2013, China imported almost 89 million pounds (inshell basis) of pecans. Within that figure, exports to Vietnam and China were both down slightly but Hong Kong more than made up the difference. Overall exports to China are up 52% over 2012 and now account for almost 60% of all pecan exports. It will be interesting to see what happens to those figures during the month of March as there has been a change in the Chinese government.  Over the past year, the country has not only experienced a significant drop in GDP; they are also experiencing a trade deficit. As such, the new administration has come down hard on all importers, especially those trying to avoid customs duties by bringing product in through Vietnam and Hong Kong.  As a result, during the month of , almond shipments to China ground to a halt with the industry suffering a 63% drop in shipments.*  

As for consumption, it is still well ahead of 2012 figures.  While the February Cold Storage figures gave everyone in the industry plenty to talk about, based on the recently released crop figures by the Georgia Pecan Commission, the cold storage figures can probably be attributed to the fact that the 2012 crop was much larger than originally forecast. The last USDA estimate put the Georgia crop at 100 million pounds.  However, based on actual receipts from orchards larger than 30 acres, the Georgia crop was 109 million pounds.  Taking into account the acreage not included by their marketing order, the Georgia crop was probably closer to 125 million pounds. If the USDA was off that much with any of the other state estimates, the US Crop was probably closer to 340 million pounds rather than the 302.8 million projected in the January USDA Crop Production report.  Unfortunately, due to the loss of government funds, we will not be getting a final 2012 crop figure as the USDA has suspended crop reports for a number of agricultural commodities, including pecans. Based on crop data over the past few years, the trees have apparently changed their alternate bearing cycle due to the severe drought that continues to affect the Southwestern US.  As such, while 2012 was supposed to be the off-year crop, unless someone has better data, it was definitely an on-year crop. Having experienced four good crops in a row, the last two of which were heavy in natives and seedlings, it is unlikely that the 2013 crop will approach the size of the 2012 crop.  While the larger than expected cold storage holdings has helped to keep pecan prices very competitive with walnuts, almonds, pistachios and the other tree nuts, a good carryout will help to keep pecan prices competitive going into the coming year.  This will be of particular importance in the ingredient and retail segments as many buyers are still not convinced that pecan prices will not again hit $7.00 per pound. While it is still very early and a lot can happen between now and October, it would appear that the industry is going to carry out approximately 175 million pounds.  The industry experienced larger carry outs in 2000, 2002 and 2008.

Finally, it is time that the industry came together to discuss the implementation of another industry marketing order.  For years the industry has complained about the USDA Crop Production and Cold Storage reports. Well there is no longer a Crop Production Report to complain about. It is gone, and unless Congress comes up with additional funding, it is gone for good.  While the data was always subject to debate, the industry at least had a number to work with.  Unlike the other tree nuts that operate under industry marketing orders and generate their own exact data, the pecan industry will be left with nothing but very subjective, self-serving quesstimates.  With no crop production data, the pecan industry can expect to fall even further behind.  Without knowing how big our crop really is, where the product is going, etc., how can the pecan industry hope to compete against its much better funded counterparts?  The time has come for everyone in the industry to put aside their petty differences and come together for the good of the industry.  There is no time to waste.

As usual, should you have any questions, please do not hesitate to contact me at 630-377-2628.

*Note: Unlike FAS data which is released 40 days after month’s end, due to their marketing order, almond data is available within ten days of month’s end. Year to date almond shipments to China are down 12%.

 

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