Shorter Supply, Quality Issues and Increased Consumption Lead to Higher Prices

January 24, 2020

For those who are relatively new to the pecan industry, there was a time when the USDA NASS published a September, October and  December crop estimate as well as a January Preliminary Crop report and a June/July Crop final.  Due to budget cuts, and the cost of publishing that number of reports for such a small industry, most of those reports have been discontinued, taxpayer dollars now only paying for an October crop estimate and a June final, reports that only cover the five largest producing states; not very helpful for anyone trying to determine supply. Last year the American Pecan Council voted to fund both a December Crop Estimate and a January Preliminary Crop Report, the idea being that with better and more timely information, it might be easier for sellers to more accurately price their product during the heavy kernel contracting months, thereby reducing the chances of significant price fluctuations. For those who may not have noticed, the USDA December report reduced the projected size of the crop from 281 million pounds (inshell basis) to 261 million pounds.  Today, the USDA released the preliminary crop report and revised the size of the crop to 264.5 million pounds. Copies of the report are available on the USDA NASS website. Based on the  newly released estimate, this is how the supply situation is shaping up:           

Crop Year


2019 (est.)




US Crop



Mexican Imports



Total supply






While the APC still has not published the Industry’s December shipment data, based on USDA FAS data (published earlier this month), even with the reduction in shipments to China, total pecan exports are up 19.4%, inshell exports are up 25.4% and kernel exports are up 16%..  For the inshell market, what is the most positive news is that, even before the recently announced trade agreement between the US and China, through November, inshell exports to China have already equaled 2018/2019 shipments.  Further, many growers are reporting increased inshell bookings for later this year, all good news for an industry struggling to regain its footing.

Imports from Mexico continue to exceed last year’s record figures.  However, the increase is primarily due to kernel imports.  Inshell imports continue to lag last year’s record levels, down approximately 25%.

The other report that was released this week was the USDA’s Cold Storage Holdings.  Not unexpectedly, total supplies in inventory were down again when compared to the same period one year ago.  In November, inventories were down approximately 10 million pounds over 2018, the first such month since April 2018.  December’s inventory was down 19 million pounds over 2018; a good sign relative to consumption and one of the contributing factors to recent inshell price increases.  The only down-side; with continued increases in exports, and a shorter supply, increases in exports have meant decreases in product available to satisfy domestic demand.  While it is still too early to draw any hard conclusions, when one considers the quality issues being created by another year of unfavorable weather conditions during harvest, should the current figures turn out to be accurate, domestic buyers may want to ensure that they have enough product to get them into the fall as availability, rather than price, may become the determining factor in being able to secure additional product should it be needed later in the year.