The 2016 Pecan Crop Looks Good; Worldwide Supplies Projected to be Higher

September 23, 2016

Recently released 2015 crop year export figures contained a lot of both good, as well as disconcerting, information. On the good side, while US pecan exports were off 12.5% over the previous year, all of the reduction can be attributed to China. Exports to most of the other major pecan markets were up. Not only did the shipments of shelled pecans out-pace last year’s record, shipments of inshell to many of those same markets also increased; a possible indication that the marketing efforts of US Pecan are finally starting to pay off.  One of the brightest positives, a 28.6% increase in meat shipments to China; the fourth year in a row of increases.

On the disconcerting side, inshell exports to China were down 35.7%; the lowest since the 2010 crop year.  Due to last year’s market conditions, that may not be surprising. However, when one takes a closer look at China’s recent purchasing history, the trend is not good.  Since 2012, China’s appetite for inshell pecans has decreased suggesting that Chinese demand may not be as inelastic as many Growers might have thought. While there could be several reasons for the decline in shipments (i.e. the Government crackdown on tax cheats, a slowing Chinese economy, etc.), the availability of more competitively priced alternatives, as well as two years of near record prices, may be taking their toll.

Tight supply and high prices continue to be the watchword of the current market.  Even with most pieces trading at or near the level of Extra Large or Jumbo Halves, there are none to be found. Shipments of shelled meats continues to be very strong with many customers coming back into the market to purchase additional product for what is expected to be a very good fall season. With the harvest still several weeks away, and the Chinese booking early harvest Stuarts and Desirables at near record levels, buyers should not expect to see a decline in prices anytime soon.

As for the 2016 crop, things are progressing well. Assuming that there will not be a repeat of last year’s disastrous harvest weather, it would appear that the US will have a good pecan crop.  At the recently concluded National Pecan Sheller’s Association meeting, the NPSA estimated the crop at 306,250,000 lbs (inshell basis).  If that number holds up, the 2016/2017 supply situation shapes up as follows:

2016 Carry-In (NFF est.)                       133,000,000

2016 US Crop (NPSA est.)                     306,250,000

Mexican Imports (NPSA est.)               200,000,000

Total (NFF est.)                                     639,250,000*

*Note: 2015 Total Supply – 591.7 million pounds

Based on currently available data, world-wide supply will also be up dramatically.  Mexico is estimating a crop slightly larger than last year’s record crop of 270.5 million pounds. South Africa, while not producing as much as had originally been forecast, did produce a crop approximately 2.76 million pounds more than a year ago (21.5 million pounds).  Adding in Australia’s 5.7 million pounds, world-wide supply will be just short of 735 million pounds (2015 total supply was approximately 672.2 million pounds).

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