Amerian Pecan Council Meets for the First Time While the Industry Deals With High Prices & Reduced Consumption
November 25, 2016
On November 16 and 17, the newly established American Pecan Council met for the first time. Hosted by the USDA at the George H. W. Bush International Airport Marriott Hotel, the meeting started with introductions, a briefing on the mechanics of the marketing order and the USDA’s role in its implementation. After lunch, the industry representatives selected the Board’s officers electing Mike Adams as President, Bruce Caris as Vice President, G.L. Straley as Treasurer and Trent Mason as Secretary. Other business included the establishment and population of seven committees, the election of chairs for each, approval of an assessment of $.03/lb on improved varieties, $.02/lb and natives and substandard pecans and then making the assessment retroactive to October 1, 2016. The headquarters for the new organization will be in the Dallas – Fort Worth area. The upcoming issue of Pecan South magazine will have an in-depth article on the meeting. A lot was accomplished; however, because many of the actions taken by the Board will need to go through the rulemaking process, a process that could take another three to four months, formal implementation may not occur until sometime in the first quarter of 2017. It is important for all first handlers to remember that even though the regulatory process will take some time to navigate, they are still responsible for collecting the assessments. The Board expects to establish a bank account soon so that those wishing to forward assessments already collected can do so. The official forms will be sent out once approved by the Office of Management and Budget. As the newly elected chair of the Reporting and Statistics Committee, I will be meeting with representatives of the California Almond Board next week to discuss how their process works, what doesn’t work and why. The committee wants to make sure that the information we’ll be asking for is relevant, beneficial and accurate. Should you have any questions or suggestions as to what type of information should be collected, and what types of reports you would like to see, please do not hesitate to contact me. We welcome your input.
As for the market, due to the slow start of the US harvest, prices continue to remain firm. Because the Chinese entered the fall with little or no carryover inventory, and because their New Year is earlier this year, they have exerted a lot of pressure on both the US and Mexican Growers to ship product as soon as practical. While a lot of their early purchases focused on the export quality pecans coming out of Mexico, the last few weeks have seen heavy activity in the US.
As the Chinese begin to exit the market, it is anticipated that inshell prices will begin to moderate thereby allowing inventory starved US Shellers to begin to replenish their stocks. Based on recently released USDA Cold Storage and import figures, as well as FAS export data, fewer US inshell has been sent across the border for reprocessing than a year ago while imports from Mexico have risen 15.9% over last year’s record pace. Yes, there are reports of lower crop yields in Georgia, Texas and Oklahoma; however, based on currently available data, it is still anticipated that overall supply will be similar to that of last year.
Finally, other than Macadamias, pecans are currently the most expensive nut in the overall nut basket. With walnuts trading at levels almost $4.00/lb lower than pecans, pecan consumption will be adversely impacted. At current market levels, the industry is setting itself up to lose another 13 to 15% in consumption. Do current market prices really reflect anticipated supply?