Under the Guidance of the American Pecan Council, the Pecan Industry is Laying a Solid Foundation for the Future

August 22, 2019

Having just returned from what turned out to be a very productive American Pecan Council meeting as well as the industry’s second Pecan Congress, one cannot help but be impressed with the progress that the industry has made over the past twelve months.  New kernel and inshell standards have been approved and sent to the USDA for publication and public comment, industry marketing efforts are beginning to pay dividends, both domestically and internationally, for the first time ever, the industry is compiling accurate production acreage, the recently completed strategic plan is providing the direction needed to move the industry forward and much much more. However, there was one piece of information that repeatedly came out during the meeting that caused quite a stir.  More than once it was mentioned that over the past year, due to the US/China trade dispute, shipments of Mexican inshell pecans to China increased over “3,000 %.”  Obviously, this was not something that US Growers wanted to hear. The number was attributed to a statement made by a Chinese official at recent industry meeting in China attended by pecan growers from around the world including several from the US.  Rest assured that based on historical data, it would be physically impossible for Mexico to have increased their inshell shipments 3,000 %. Mexico usually ships between 20 and 35 million pounds of pecans to China.  A 3,000 % increase would be more pecans than the total of the world’s production, almost as ridiculous as stating that industry commitments are 1 billion pounds.  There is no doubt that Mexican inshell shipments increased, but statistically speaking, unless the Mexican crop was significantly larger than recently reported, it could not have increased much more than 100%.  According to the Mexican Agricultural Information Service, Mexico’s 2018 crop was 348.5 million pounds of which 293 million were shipped to the US[1].  You do the math. Yes, as expected, Mexico was able to cover some of China’s shortfall and will again this year.  However, for a variety of very good reasons, China still prefers US grown inshell and will continue to do so.  As we have seen in the past, when China wants something, they create ways to get it.  This year will be no different.  While we should not expect to ship 80 million pounds to them, US pecans will continue to flow into China.

Finally, while FAS will not publish their final 2018 export numbers until early next month, preliminary data continues to show increases in both domestic and international kernel consumption.  Through June, kernel exports are up 20.9%.  Based on currently available data, domestic shipments are up 8.6%.  While the Cold Storage figures released today continue to show record inventories, half prices continue to firm as supplies remain tight. Stable competitive prices over the coming months should facilitate continued consumption growth.  The trade war will not last forever.  In the meantime, the industry is laying a solid foundation for long-term growth and market gains. 

[1] USDA Federal State Market News