As Pecan Prices Firm, The South African Pecan Industry Prepares for the Future
March 06, 2015
March 6, 2015 –
Having just returned from South Africa, I cannot help but be impressed with the state of the South African pecan industry. While their shelling industry is not much to speak of, their pecan orchards, and the farmers who own them, are to be commended for what they have accomplished. In less than ten years, they have gone from a minor player on the world stage to a major producer. As has been known for some time, based on current projections, they will be producing a crop of just under 100 million pounds by 2022. This year’s crop, if they can get if off the trees, could be as large as last year’s crop of approximately 21 million pounds (inshell basis). Their orchards are beautiful and their quality is very good. Further, while their assessments are small, they are in the fourth year of a check-off program designed to help them promote their product. At the moment, over 90% of their harvest is going to China in the form of inshell. However, they are in the early stages of putting together a broader marketing program designed to address the anticipated increases in production.
With respect to current market conditions, over the past few weeks’ meat prices have moved dramatically higher as Sheller’s finally begin to adjust their prices relative to current supply conditions. Based on the Georgia Pecan Commission’s data, 63 million pounds of production has already been accounted for. Since there is no assessment for orchards under 30 acres, and assuming that there are still production reports to come in, the Georgia crop was probably somewhere between 70 and 75 million pounds, down from the USDA October projection of 85 million pounds but right in line with their January preliminary estimate of 73 million pounds. This would tend to indicate that the USDA preliminary crop estimate of 265 million pounds is pretty good. As such, with Mammoth Halves, Jr. Mammoth Halves, Jumbo Halves, Extra Large Pieces and Large Pieces already in short supply, buyers should not expect to see any price declines in the months ahead. Further, unless the US sets a very large crop, prices will probably continue to rise well into the fall.
Meanwhile, Mexico continues to ship large quantities of pecans to the US. Through February 28th, over 152 million pounds have crossed the border (inshell basis). Based on US inshell exports, that nets out to about 147 million pounds. If not for the ability of US Sheller’s to procure Mexican pecans, meat prices would have escalated much sooner and too much higher levels than currently being experienced.
As for the export market, through January, worldwide US exports were up from 87.9 million pounds to 102.1 million pounds over the same period a year ago. While China accounts for a significant portion of the increase, exports of shelled pecans are up almost everywhere. Based on current trends, consumption could approach 500 million pounds for the 2014 crop year.
As usual, should you have any questions, please do not hesitate to contact me at 630-879-5200.