USDA Releases their October 2015 Cold Storage Holdings
November 23, 2015
The USDA released their October Cold Storage figures today. Based on the USDA figures, the 2015 supply situation shapes up as follows:
2014 Carry-out 121,319,000
2015 US Crop (USDA estimate) 272,340,000
2015 Mexican Imports (estimate) 180,000,000
2015 Total Supply 573,659,000
*Note: 2014 Total Supply is estimated to have been 638 million pounds (inshell basis) and does not take into account the USDA’s double counting of inshell shipped to Mexico for processing. 2014 consumption was approximately 516.6 million pounds (inshell basis).
Looking at the raw numbers, one could easily conclude that the industry will carry-out less than 60 million pounds into the 2016 crop. However, with walnuts trading at $3/lb. less than pecans and China expected to import less than they did in 2014, the industry should still be able to carry-out approximately 110 million pounds into the 2016 crop; more than enough to cover current demand.
However, having said that, there will continue to be a severe shortage of pieces. In order to meet projected piece requirements, most Shellers are going to have to cut halves. That is an expensive, time consuming process. Further, making pieces to meet the tighter specs of a more sophisticated food industry has become a losing proposition. It is time that the US Shelling industry realize that it can no longer sell pieces at prices below those of halves. Continuing to do so will further weaken an already financially strapped industry.
Finally, buyers need to beware of offers being made by a large southwestern brokerage firm promising new crop contracts, well below current market prices, with price protection! The prices being quoted cannot be delivered based on the current cost of inshell, and based on current projections, will probably not materialize. Since the supplier is purported to be a large Mexican sheller, one would have a better chance of betting everything on black in Vegas than getting the quoted contract delivered.
