Prices Firm as the Poor Quality of the Mexican Crop Leads to Shortages of Large Halves

December 22, 2020

On December 10th, the USDA released their December Crop Forecast estimating the US Pecan Crop at 306.5 million pounds (inshell basis).  This is a 5% increase over their October estimate and 20% over last year’s crop.  It is important to remember that the USDA only provides estimates for the five largest pecan producing states which account for approximately 85% of total US production.  With that in mind, the US crop is actually closer to 350 million pounds.  While the USDA reduced their projection for New Mexico by 9-million pounds (from 86 to 77 million pounds) and left Arizona unchanged, it increased its forecasts for Georgia, Oklahoma and Texas.  The biggest increases were seen in Texas and Georgia where the estimates were raised by 15-million and 10-million pounds respectively. If current estimates coming out of Georgia are correct, the USDA figure of 135 million pounds could still be 10 to 15 million pounds too low.  Based on currently available information, the supply situation shapes up as follows:


2019 Crop Year

2020 crop Year




US Crop



Mexican Imports



Total Supply









NOTE: Assumes a 50% meat to inshell conversion rate.  The US crop estimate is the USDA’s estimate for the five largest producing states.

While the Mexican crop has been the primary driver of both supply and pricing the past several years, the quality of this year’s Mexican crop has been poor at best.  Further, the crop would appear to be smaller than originally forecast as evidenced by the fact that at least one major Mexican sheller has been forced to purchase high quality inshell out of Georgia just to cover current commitments.  Further, recent border crossings/imports from Mexico are down 18.2% over the same period a year ago.  Many within the industry feel that that the current quality issues could be a foreboding of long-term problems for the Mexican growers as current plantings may have exceeded the available supply of good quality water.

Meanwhile, US Pecan exports are up approximately 7.75% driven by a 212% increase in inshell purchases by China.  While Chinese exports are still far below historic levels, the poor quality of the Mexican crop and the dwindling supply of large high quality inshell in country has made it economical to purchase US inshell even with a 22% tariff.  While it would appear that China has enough product in-house to handle their New Year’s celebration requirements, there has been significant interest in product for shipment in the first and second quarters of 2021.  As such, many Southeastern growers with low count high yield inshell are said to have put between 20 and 25 million pounds into cold storage.

While overall exports are up, kernel exports are down.  COVID issues and an increase in US consumption have played a major part in this downturn.  However, the bigger problem may be the shortage of  both Mammoth and Jr Mammoth Halves.  The current shortage has led to a firming of prices across the board.  While there is still a significant differential between the prices of halves and pieces, prices on both have risen $.30/lb to $.40/lb over the past several weeks.

Finally, the USDA released the November Cold Storage holdings today.  Unless they make a significant revision next month, November 2020 holdings will go down as the largest inventory ever for a November. However, until the APC publishes their November ‘Committed Inventory’ figure, it would be irresponsible to draw any conclusions from the number.