Domestic Consumption Soars based on USDA Data
June 21, 2019
Good information is essential to running a successful business, especially in the pecan industry; an industry historically starved for good data. While the American Pecan Council (APC) is slowly changing that, there are still some sources out there that don’t seem to get it. Such was the case recently when on multiple occasions, a certain blogger posted that the US Shelling industry had committed to ship over 1 billion pounds of pecans. In the most recent blog, the writer stated, “With a 525,485,734 pound supply deficit, the pecan industry may have trouble filling current contracts.” To make matters worse, the same article stated, “Over the past 8 months, the US Pecan industry has committed to ship1,042,086,408 lbs of pecans.” Nothing could be further from the truth. Earlier this week, the USDA released their annual pecan crop report indicating that the 2018 pecan crop was 243 million pounds. While they only survey the eight largest pecan producing states, those states account for approximately 90% of US pecan production. Comparing the USDA final crop figures with the April 30, 2019 APC report relative to shipments, the 2018 crop was much closer to 280 million pounds (The APC will publish their final 2018 Shipment Report sometime in September). Regardless, based on currently available data, this is how the supply situation shapes up:
2018 Carry-in 162,653,000
US Crop 243,000,000
Mexican Imports (NFF estimate) 276,827,000
Total Supply 682,480,000
Less product shipped (APC data 4/30/19) 167,898,970
Less product committed (APC data 4/30/19) 126,273,124
Product available for sale 388,307,906*
Note: Based on the above figures, 56.9% of the total supply is still uncommitted
Mexico continues to ship record volumes of pecans across the border; 28.6% more than last year at the same time. Contrary to a recent blog report stating that “Over the past 8 months the US has imported roughly 84 million pounds of pecans of which 99% came from Mexico”, based on USDA import figures, through June 17, 2019, Mexico has shipped over 270 million pounds (inshell basis) to the US; a new record and there are still forty-four days left in the FAS ‘export’ year.
Todays release of the May Cold Storage Holdings, while encouraging, will do nothing to firm the market in the near term. When prior year data is converted using the APC 50% kernel-to-inshell conversion rate, the May 2019 cold storage holdings were the second largest ever for a May, second only to May 2013.
So, what was encouraging? Excluding exports to China, consumption is up. Based on APC, NASS and FAS figures, kernel exports are up almost 21% over the same period a year ago and domestic shipments are up 13.8%. In fact, barring unforeseen natural disasters, if current trends continue, 2019 domestic shipments are on pace to set a new record.