Mexico Reports Record 2014 Pecan Crop/August Cold Storage Dissappearance Dissappointing

September 22, 2015

For the first time ever, the Mexican pecan crop was larger than the US crop.  Based on Mexican Government figures released on July 31, 2015, the Mexican crop was just under 271 million pounds compared to a US crop of 264 million pounds.  With Mexico continuing to plant more trees, this will probably not be the last time this happens. While many within the industry will counter that figures coming out of Mexico City should be looked at with a jaundiced eye, consider the fact that according to both FAS and US Customs data, over 200 million pounds of Mexican pecans (inshell basis) came across the border.  Even when one factors out the 28 million pounds of inshell that was sent to Mexico for processing, the Mexican figure is very believable.  Understanding that they traditionally ship between twenty and thirty-five million pounds of inshell to China and generally consume about 25 percent of their own production internally, the figures work out as follows:

Net Exports to US (200 million – 28 million):                   172

Mexican Exports to China (estimate):                                30

Mexican Internal Consumption (estimate):                        68

Total Mexican Crop                                                           270

Based on the above figures, the US shelling industry continues to process and/or market between 65 and 75% of the Mexican crop.

Earlier this month FAS released the final 2014 export figures.  As had been projected, the US Pecan Industry set a new export record sending almost 217 million pounds (inshell basis) overseas.  Shipments were up in all major markets. While shipments to China waned from May thru July due to the government’s crackdown on import tax cheats, China still took in almost 90 million pounds (inshell basis); 20 million pounds more than a year ago.  Shipments of meats to China also increased.

Based on today’s Cold Storage figures, it would appear that 2015 total supply will be similar to that of 2014. The lower than anticipated August disappearance can probably be attributed to two things; the crackdown in China, resulting in less exports, and the inability of the US Shelling industry to meet heavier than anticipated demand. For the first time in three years, Large and Medium pieces are in shorter supply than Mammoth and Jr Mammoth Halves, and in many cases, aren’t available at any price. Further, even with walnut prices more than $2 per pound less than that of pecans, buyers should not expect to see any relief in the current supply situation until much later this year or early 2016.