Demand remains strong even in the face of higher prices and limited supplies

March 28, 2011

Based on the latest USDA Cold Storage Report, it would appear that at this time, record market prices have not adversely impacted demand. While demand from China has temporarily slowed, meat shipments continue to be very strong to the domestic market. As expected, there are shortages of Mammoth, Jr Mammoth and Jumbo Halves, as well as Large and Medium Pieces; however, Shellers do not appear to be having any problems supplying their customers.  Although it is still too early to say how the higher prices will impact consumption later in the Spring and into the Summer, Spot buyers may have difficulty getting adequate supplies as new crop approaches. Further, once the Chinese step back into the market to cover their Fall requirements, depending on what the new crop projections are, there may not be much price relief until well into the harvest.


Supplies continue to be very tight. With the industry having oversold their position early last Fall, prices continue to remain very firm. Those customers who were not fortunate enough to have written contracts back in September are now finding it next to impossible to cover their needs.  Even though Walnut prices remain well below the price of Pecans, the inability of buyers to get sufficient quantities of Walnuts has allowed the Pecan Shellers to continue to sell at record levels as they are still able to handle additional requests for product.  Since this was a record Walnut crop, and the industry has experienced three years of good production, it would be logical to assume that supplies will continue to be tight well into next Fall.


The weather was less than ideal during the bloom. As such, most within the industry do not expect a record crop.  Early prognosticators feel that the crop will be similar in size to this past year's crop.  However, cool and wet weather since the bloom appears to be delaying the development of the kernels raising the possibility of a repeat of last year's late harvest. Almonds remain the cheapest nut of all the major nuts.  As such, shipments continue to be strong. Further, it would appear that there will be sufficient carry over supplies to help the industry get through a late harvest should it develop.  As such, prices have not changed dramatically in the past few weeks and barring a late freeze or other natural disaster, should remain relatively stable in the short term.