December Cold Storage Figures Show Good Movement as One Mexican Sheller Attempts to Manipulate the US Market
January 29, 2018
Based on last week's release of the December Cold Storage Holdings, consumption continues to be good. While overseas shipments, particularly to China, slowed during the month, they are still slightly ahead of last year. This can be generally attributed to reduced market prices and a weaker dollar in Europe.
Mexican pecans continue to stream across the border. As of last week, over 118 million pounds (inshell basis) have entered the US, down approximately 22% over the same period a year ago. If that percentage holds through the season, over 190 million pounds could come across the border. While this figure has not been adjusted to take into account US inshell sent to Mexico for processing (‘double counted’), based on historical data, the industry estimate of 160 million net pounds appears to be ‘on target.’
The American Pecan Council met last week in Dallas. Once the USDA representatives finally arrived (Government shut-down kept them from arriving on Monday), they were met with a number of comments expressing the industry's frustration with the lack of USDA resolution on the reporting forms (now in the approval process 9 months), the USDA's failure to approve the industry's new marketing slogan and their inability to make a quick decision on the list of answers to frequently asked questions relative to the payment of 2016 assessments. This has quickly become an exercise in USDA micro-management of an industry that they are supposed to be helping. Letters of complaint from the industry to the Secretary of Agriculture, in support of the APC's efforts, wouldn't hurt.
Finally, one major Sheller has declared war on the US Shelling Industry. Sending out an email last week with prices below the cost of anything the US can produce, buyers have been quick to use those prices to drive the market crazy adversely impacting the bottom-line of US Shellers. This is a good example of why something needs to be done about the cost advantage held by the Mexican Shelling Industry.