Pecan Prices Remain Firm Even With Near-Record Cold Storage Holdings
February 28, 2017
This past Thursday, the USDA released the January Cold Storage figures. As has been the case for the past several months, supplies are still running well ahead of last year; 284.8 million pounds vs. 260.9 million pounds (inshell basis). While prices continue to be firm, there has been some weakening since December’s record levels. However, with the exception of macadamias, pecans continue to be the highest priced tree nut in the market basket.
Mexico continues to set new pecan export records having shipped over 170.2 million pounds (inshell basis) to the US through last week (as compared to 149.3 million pounds last year); almost 14% more than a year ago. Further, unlike last year where significant quantities of US inshell were being shipped to Mexico for shelling, to date, very few pounds have been shipped to Mexico this year. As such, the net imports are actually higher than a year ago.
While January export figures will be released next Tuesday, December’s figures showed a slight increase in pecan exports. However, if one removes China from the equation, exports were actually down. While many within the industry had expected China to purchase upwards of 90 million pounds this year, near record price levels have dampened their appetite. Based on currently available data, China many not take much more than 70 to 75 million pounds.
Considering all of the above, and assuming that the USDA’s October crop estimate is accurate, it is hard to explain why prices soared to record highs. With the sheller’s having paid record levels for their inventory, there is certainly no reason for them to over-inflate the Cold Storage figures. With pecans having to compete head-to-head with walnuts in approximately 60% of the marketing channels, the next few months could be very interesting.
Finally, the American Pecan Council had its second face-to-face meeting last week. While there were a number of issues that needed to be resolved, one of the most important was the election to fill the two remaining open seats on the Board. Congratulations to J. B. Easterlin of Easterlin Pecan Company who was elected to fill the accumulator seat and Ms. Donna Volz, Senior Marketing Director for Sonic in Las Cruces, NM, who was elected to fill the public seat. Both bring a wealth of experience to the Board. Other business included the approval of the reporting forms, approval of the By-Laws and approval to fund three projects. While the reporting forms must go through the regulatory process before they can be sent out to the industry, many handlers are voluntarily submitting their assessments early thereby enabling the Council to get off to a good start. More information regarding the projects, assessment, monthly reporting, etc., will be forthcoming in the months ahead.