Domestic Pecan Consumption Continues to Shrink in the Face of Increased Demand From China

May 22, 2017

Based on today’s release of the April Cold Storage Holdings, as well as currently available data, it would appear that overall pecan consumption is only down about 7%.  When one considers current pricing levels, and the fact that the industry lost about 10.5% consumption last year, this is considerably better than what had been expected.  As has been stated in several of my earlier newsletters, much of this can be attributed to China’s increased appetite for shelled meats. However, this continues a trend of increasing overseas shipments in the face of decreased domestic purchases.  Today’s release would seem to indicate that domestic consumption is down almost 14% over the same time a year ago amounting to a loss of almost 86 million pounds (inshell basis) in the past two years.

There are several reasons for this continuing trend; quicker payments from overseas customers, fewer regulatory hurdles and domestic Purchasing and QC departments who have little or no understanding of the shelling process, just to name a few.  With margins continuing to shrink, Mexico’s huge labor advantage and the ever increasing disconnect between inshell and shelled meat prices, the US Shelling industry continues to struggle to adapt.  An industry that once boasted over one-hundred shellers is now down to a handful.  While increased supplies will help, as will an active effective American Pecan Council, until the industry learns how to operate as an ‘industry’ rather than separate and distinct entities, more Shellers are going to go the way of Funston, Standard Brands, Beatrice Foods, Gold Kist, SNA, Morvan Partners, etc.