May Cold Storage Holdings Figures Indicate New May Shipping Record

June 24, 2016

Today’s release of the May Cold Storage Holdings, while impressive, left more questions unanswered than answered.  Assuming that the figures are correct, and are not adjusted next month, the industry shipped more pecans in the month of May than during any other May in history; and not by just a little.  In May of 1990 the industry shipped 28 million pounds (inshell basis). According to today’s release, the industry shipped over 36 million pounds; a better than 28% increase over the previous record.  Adjusting the potential carryout numbers based on today’s release would seem to indicate that US Consumption is only down 13%.  When one takes into consideration the recently released Tri-State 2016 crop estimate, total supply could once again top 600 million pounds.

With respect to the 2016 crop, on June 17th, the Tri-State Pecan Growers Association (Arkansas, Louisiana and Mississippi) concluded their annual meeting with the first of the 2016 pecan crop estimates.  Based on input from their member growers, they estimate the crop to be 278.5 million pounds (inshell basis).  While it is still very early, and while one could certainly argue several of the figures contained in the estimate (i.e. Georgia, New Mexico and Oklahoma), considering that this is supposed to be the ‘off-year,’ the estimate would appear to be in line with historical expectations.

Mexico continues to ship product to the US at a record pace.  Through June 20th, Mexico has shipped 6.7 million more pounds then they did during the same period last year.  With almost 194 million pounds (inshell basis) having crossed the border to date, and 37 more shipping days in the FAS year, it is certainly conceivable that Mexico could duplicate last year’s record.

As for South Africa, the harvest is progressing well, albeit slower than expected. Quality is very good, and with no inshell inventory left in the US, China is paying near record prices to insure that they will have enough inventory to handle their Autumn festivals.  Due to the larger than expected size of the South African crop, China may not need to jump into the Georgia market as heavily, or as early, as they have in the past.

Finally, while overall exports have been down all year, April marked the first time that meat exports also fell.  Total exports continue to be about 14% below the same period as a year ago; competition from cheaper alternatives being one of the biggest reasons. While both walnut and almond prices have firmed in the past few weeks, Combination Walnut Halves and Pieces are still selling well below $2/lb.  Current crop Nonpareil Supreme 23/25 Almonds are trading around $3.35/lb.  As such, it is going to be difficult to duplicate last month’s shipping figures many more times in the months ahead.

As usual, should you have any questions, please do not hesitate to contact me at 630-879-5200.