Nut Market Update
May 07, 2008
Consumption continues to be very strong, particularly in the export market. China continues to be the major purchaser of inshell Pecans with exports to China surpassing 32 million pounds as of February 28, 2008. While the final crop figures are not due out until July, most in the industry feel that if this crop was not the largest ever, it was close to it. Due to the size of the crop, particularly in the Southwest, kernel sizes were very small. As such, pricing on Jumbo, Junior Mammoth and Mammoth Halves has shot up well above the $4.00/lb mark. Large and Extra Large Pieces are also in very short supply. While the Cold Storage figures would indicate the potential for a large carry out, due to heavy contracting in January, the bulk of the carry out will already be spoken for. With a very weak dollar, and the high price of Walnuts, Pecan consumption should continue to be strong well into the fall. As such, the industry will probably not see any price relief before the fall of 2009.
The Almond Board released their subjective crop estimate today projecting the 2008 crop at 1.46 billion pounds based on 660,000 bearing acres. This works out to a yield per acre figure of over 2,200 lbs. Considering that last year was only the second time ever to have a yield per acre figure greater than 2,000 lbs, this is a very aggressive estimate. Trees generally need a year to recuperate from such a high yield figure so to have the growers estimate that the trees can produce at those levels two years in a row came as a shock to many. While the immediate impact on pricing will not be known for a few days, expect consumption to remain strong as Almonds will again be the cheapest nut out there.
Supplies continue to be extremely tight. Even though prices have moderated over the past few weeks, they are still well above $4.00/lb. While early estimates of the 2008 crop are hovering around 355 to 360,000 tons, the crop did experience some damage from the recent freeze. However, many in the industry feel that the damage was minimal. It is important to remember that the projected size of the next crop will do nothing to alleviate the current shortage. Expect prices to remain relatively firm right up to harvest.