When is the Pecan Industry Going to Wake Up?

March 08, 2024

Whether you want to believe the numbers or not, it is painfully obvious that the industry is severely short of product.  Based on the recently released Cold Storage figures, there are only 205.7 million pounds of pecans in inventory; the shortest January inventory since 2012.  Based on the APC’s recently released January Commitments numbers, of the 205.7 million pounds in inventory, 173.9 million pounds is committed.  With only 31.8 million pounds available for sale until next fall, one is hard pressed to explain why sheller’s continue to sell kernels for less than $5/lb. or why growers can’t get more than $3.30/point for their inshell.

As for the overall market, the industry continues to deal with an uncertain consumer.  While supplies continue to be very low, due to macro-economic issues elsewhere in the world, exports continue to be anemic at best. If not for China’s unexpected entry into the US market this past fall, exports would be well behind last year.  Through January, China has imported approximately 41.6 million pounds (inshell basis), almost doubling their total 2022/2023 imports.  When one removes China from the FAS data, US exports are down approximately 6.7% from last year, a year which saw US exports drop 23.5%, primarily due to the lack of nut consumption in the EU. 

Mexico continues to ship as much of its product across the border as possible.  Based on recently released customs data, Mexican exports to the US are up 8.4% over the same period a year ago.  With supplies on this side of the border as tight as they are, this trend is expected to continue until Mexico runs out of product.

Overall, buyers continue to be very cautious about long range purchases.  While inshell prices have firmed slightly in the past two months, the industry has not seen a corresponding firming in the kernel market, even with the Government’s purchase of 6.2 million pounds of pieces.  Eventually, the lack of supply will overcome the lethargy of the consumer.  The question is, why is it taking the industry so long to wake up?