While Exports to China May Be Down, US Consumption Continues to be Strong
February 21, 2014
While the December export figures continue to show a decline in pecan exports over the same period a year ago, almost all of the decline can be attributed to the reduction in the amount of inshell purchased by China; down approximately 46%. This has not only resulted in low field prices, but has kept meat prices competitive with almonds and walnuts. As such, even though this year’s crop is approximately 170 million pounds smaller than the 2012 crop, the reduction in China’s purchases has allowed US Sheller’s to maintain, and in some cases expand, their meat sales to Europe and the US market.
As for meat prices, pecans continue to be the best value for the dollar. As many buyers shift their requirements from Jr. Mammoth/Jumbo Halves to other half and piece sizes, the price gap between pieces and halves continues to narrow. Sheller’s will still have a difficult time selling enough halves to cover their losses on the pieces, but as more buyers attempt to benefit from the significant price differential between the two, it may not be long before the industry sees shortages of several piece sizes. Further, based on figures released in today’s Cold Storage report, current consumption levels could result in September 30th carry-out figures that will be the lowest since 1999.
I have included eight new graphs pertaining to the pecan market as of December 2013 to illustrate the above points on the statistics page (under 'Market Conditions').
With the passage of the farm bill earlier this month, funding has finally been restored to the USDA National Ag Statistics Service budget that will facilitate the resumption of the pecan crop production reports. While the USDA announcement did not indicate when the first report would be released, it is anticipated that the first 2013 crop figures will be contained in the Noncitrus Fruits and Nuts 2013 Summary to be released in July.
During the 2014 Southeaster Pecan Growers annual meeting, industry leaders announced that a general consensus had been reached between the various grower organizations to look into the possibility of establishing some form of industry-wide check off or marketing/ promotion program. Pointing to the success of the Almond and Walnut industry marketing boards, and considering the significant changes that have taken place in the pecan industry over the past few years, many growers feel that the industry is ready to accept a marketing order. While the physical make-up of the program has yet to be decided, if things go smoothly, it could be possible to have the new program in place as early as the fall of 2015.