Beware of Stanger's Bearing Gifts

August 28, 2023

On July 31st, the USDA FAS, as well as US Customs, concluded the 2022/2023 import/export year.  While FAS will not publish their final figures until early September, US Customs data indicated that Mexico exported the same amount of pecans to the US as they did in 2021.  Therefore, based on currently available data, the supply available to US marketers shapes up as follows:

 

2022 Crop Year

2023 Crop Year (est.)

Carry-In

146,827,000

125,000,000

US Crop

277,700,000

308,500,000

Mexican Imports

232,237,000

232,237,000

Total Supply

656,764,000

665,737,000

Note: Total supply indicates product available to US marketers and does not include pecans from other pecan producing countries. 2023 Mexican Import figures and US Carry In figures are NFF estimates based on currently available USDA NASS & FAS data. The 2023 US Crop estimate is the average of the Tri-State and Texas Pecan Grower crop estimates. 

As has been projected for the bulk of this year, the US is expected to carry-out fewer pecans than at any time since 2012.


Days of Available Supply

Why do I point this out again, because over the past two weeks, one sheller, who shall remain nameless, has spent a lot of time trying to convince the growers that the industry is headed for a record crop, a 411 million pound crop to be exact.  Based on historical data, as well as the two recent grower estimates, and all available USDA NASS and USDA FAS data, that is extremely unlikely.  In fact, the industry has only produced a crop that size once in the last 100 years (1999). 

So why would this sheller make such a claim?  Because he needs the market to fall in order to cover the cheap contracts he wrote last fall.  At the time he wrote his contracts, the cost of inshell was running between $2.70 and $2.80/point.  That allowed him to write kernel contracts between $4.30 and $4.40/lb, well below the $5-plus market at the time.  However, due to a smaller than expected supply of inshell, prices quickly rose, and by March, they had moved up to approximately $3.50/point, a replacement cost that would require him to ship those contracts at significant losses. This is a sheller who claims to always pay the highest prices to the growers while selling at the lowest.  Buyers love him.  However, this past year, he cost the industry millions of dollars.  He now hopes to again convince growers that there is a huge crop coming, and because prices should fall as a result, they should sell to him now at reduced prices to avoid larger losses later. Unfortunately, many growers will buy into this lie forgetting how he snookered them last year, and until they start paying attention to the data, the industry is headed for more losses.