The Pecan Industry May Have Turned the Corner Even Without a Healthy Food Service Industry
March 08, 2021
While it is still too early to say that the worst is behind us, recently available data would seem to indicate that the industry may have finally turned the corner. Based on January USDA FAS data, as well as USDA NASS Cold Storage figures, it would appear that for the 2020 crop year, overall consumption is up approximately 6.1%. That figure is primarily driven by a 9.3% increase in domestic sales. When one considers that the food service segment of the industry has been almost totally devastated by the COVID pandemic, to see increases in both the domestic and export markets is very encouraging. If current Government estimates are correct as to when the US will reach ‘herd mentality,’ a resurgent food service segment could help to bolster consumption gains in the third and fourth quarters of 2021.
For the past several months, export shipments have been dominated by increased exports to China. Based on USDA FAS data, exports to China, while nowhere near pre-tariff levels, were up 23%. Due to political unrest in Hong Kong and a clamp-down on gray channels through Vietnam, mainland China now accounts for 96.7% of all pecan exports destined for China.
While imports from Mexico were down by 22.6% through February, Mexican exports to the EU were up, increases that came at the expense of US Shellers. This downturn, confirmed through Mexican export data, is clearly evident in the USDA FAS data. Kernel exports are down 8.4% over the same period last year. As such, continued APC marketing efforts in the EU, Germany and the UK in particular, are even more critical. Now is not the time to pull back.