The September Cold Storage Data Sends Mixed Signals

October 24, 2014

The USDA, National Ag Statistics Service released their September Cold Storage Holdings this past Wednesday.  Using their figure, the 2014 US supply situation shapes up as follows (inshell basis):          



2013 Carry-Out


2014 US Crop (USDA Estimate)


2014 Mexican Imports (NFF Est.)


2014 US Total (NFF Estimate)


*Note: 2013 US Total Supply was approximately 611 million pounds (inshell basis)

Based on currently available data, it would appear that the 2013 crop year will end with a consumption of approximately 444.6 million pounds (inshell basis).  While the September figures were not as low as many had expected, it should be remembered that the industry consumed almost 6.5 million pounds of Mexican meats during the month of September.  When added to the meats shipped out of the US inventory, the industry shipped 37.2 million pounds of product (inshell basis) during the month; a very healthy figure!

While this bodes well for continued strong consumption, it does not bode well for the health of the US Pecan industry. Based on the above figures, Mexico supplied almost 40% of the US market’s meat requirements in September, not because there was a shortage of product, but because the Mexican product was cheaper.  As has been the case for the past several years, it is still cheaper to purchase Mexican meats than to buy and shell US inshell.  The down side is that every pound of Mexican meats shipped in lieu of US product held in cold storage means less money to buy US inshell.  Until the Sheller’s can get their money out of the 171.5 million pounds of product currently held in cold storage, they will continue to be short of funds to pay for new crop. The use of Mexican meats is only a short term ‘Band-Aid’ for US Shellers in financial trouble.  US Sheller’s cannot compete with the Chinese for the bigger nuts and they cannot compete with the Mexicans when it comes to the cost of shelling. They are trapped. At the moment, the only advantage US Sheller’s have is their ability to shell to higher tolerances thereby producing a higher quality product.  However, that advantage is rapidly fading. Due to continuing losses, one large Sheller has already shuttered his plant, a major Sheller is moving their operation to Mexico and another Georgia plant is up for sale.  It is time that the industry gets together to address the growing competition South of the border.  If the Mexicans are allowed to continue dumping their meats into the US market, it won’t be long before more Sheller’s either decide to move their operation or get out of the shelling business altogether; neither of which would be good for the US pecan growers.

As usual, should you have any questions, please do not hesitate to contact me at 630-879-5200.