US Domestic Pecan Consumption Rises

August 22, 2013

While the 2012 crop year export/import data will not be published by the Foreign Ag Statistics Service (FAS) until early next month, Customs data reflects another increase in pecan imports from Mexico.  Between August 1, 2012 and July 31, 2013, the US imported 152.39 million pounds (inshell basis) from Mexico, an increase of approximately 3.85 million pounds over the prior year. Assuming that the 2012 crop was approximately 375 million pounds, consumption is currently running over 440 million pounds, an increase of approximately 11.4% over the same period last year.

Unlike the past eleven months, the increase is not confined to the export market.  For the first time since 2008, it would appear that domestic consumption is also up.  Based on preliminary data, US domestic consumption has jumped from 238.2 million pounds a year ago to approximately 247.4 million pounds. Further, considering the high price of almonds, walnuts and pistachios, pecan consumption should continue to grow as more nut users switch from high priced alternatives back to pecans. The July Cold Storage Holdings indicate a disappearance of 34 million pounds (inshell pounds); the largest July decline ever.  While consumption continues to accelerate, barring a natural disaster, industry supplies should still be sufficient to keep prices very competitive in the months ahead; even with smaller than expected crops in Australia and South Africa.

Exports also continue to do well. While inshell shipments to China have ground to a halt, they should still reach the 100 million pound (inshell basis) level projected earlier in the crop year. Like the increases seen in the domestic shelled pecan market, overseas buyers continue to increase their purchases of shelled pecans. With a weak dollar and the tight supplies/higher prices of walnuts and almonds, June shipments of shelled pecans increased approximately 9% over the prior month and are up over 10% for the year.

Finally, due to the US Government’s decision to discontinue the practice of collecting and publishing pecan crop production data, there will be a lot of confusion, as well as heated discussions, as to the actual size of the 2012 crop and the upcoming 2013 crop. Early sales of good quality low count high yielding improved variety inshell would seem to indicate that the price gap between halves and pieces is not going to change much in the weeks ahead.  Combined with a very small native crop, all sizes of pecan halves are going to be in short supply.  Pieces, on the other hand, will continue to be a bargain. However, if current crop projections for the US and Mexico come to fruition, the days of sub-four dollar pieces could be coming to an end.. Shorter supply, as well as the need for the shelling industry to recoup some of their losses, should move prices higher.