June Cold Storage Holdings Indicate Smallest Carry-Out Since 2017

The USDA NASS June cold storage figures released today continue to indicate that the industry will carry-out fewer pecans than a year ago, and fewer than any year since 2017.  Based on currently available information, the supply situation shapes up as follows:

Note: Total supply indicates product available to US marketers and does not include pecans from other pecan producing countries. 2021 Mexican import figures are based on currently available USDA Market News data.  2022 Carry-In and Mexican Import figures are NFF estimates based on currently available USDA NASS & FAS data.  The 2022 US Crop figure is the estimate of the Texas Pecan Grower’s Association.

To date, the Mexican Government still has not released last year’s final crop figures.  However, based on import data, it would appear to have been around 300 million pounds (inshell basis).  Industry supply was down about 120 million pounds last year from the prior year’s record supply.  Assuming that the early crop estimates are correct, the additional 30.5 million pounds is expected to have little or no impact on pricing.  With the costs of everything else up dramatically, unless both the US and Mexican crops turn out to be significantly larger, any downside price potential is significantly less than the upside risks.  Natives will continue to be in short supply as will pieces.  Further, assuming that kernel quality remains good, there is an excellent chance that the difference in price between halves and pieces could disappear for the first time since December of 2016.  While many buyers are already trying to lock in 2022/2023 prices, Sheller’s would be foolish to do so at this time.  However, that assumes that they’ve learned from similar mistakes in the past, a very big assumption.