Update To The Trade


Update to the Trade
October 13,2014

USDA has announced their first estimate of the 2014 pecan crop at 275.6 million inshell pounds. The National Pecan Shellers Association at their September meeting estimated the crop at 285 million inshell pounds while the Tri State and Texas estimates ranged from 256 to 264 million inshell pounds. Cold storage holdings through September 30, 2014, are estimated to be 151 million inshell equivalent pounds. Assuming we consume the same quantity in October 2014 as we did in October 2013, we would expect a carryout of 110 to 115 million inshell pound equivalent. We utilize the October 31st cold storage number as the official carryout number as October is a very large shipping month yet very little new crop inshell will move during this month.

Listed below is a supply/consumption chart reflecting the latest information received.

Crop Year2008/092009/102010/112011/122012/132013/142014/15
USDA Cold Storage
Carry-In 10-31

169

100

67

99

128

139

115***
US Crop202302297270367266276**
Imports80120128100152130130
Total Supply451522489469647535521
Consumption352454390340508420 

** USDA Crop Estimate 10-10-14 *** Estimated Carry-In October 31, 2014


This crop is considered the on-year cycle although crop predictions to date indicate a shorter than normal on-year cycle. While the crop set was good and weather was favorable during the growing season, some trees in the midwest and southwest are still recovering from the drought of a few years ago and trees in the southeast are still recovering from the excessive rainfall that was experienced last year. The southeastern states are just beginning to harvest nuts for movement to the China market and gift pack trade. Major harvesting in these areas is not expected to begin until the early November period. The West Texas, New Mexico and Northern Mexico regions also experienced good growing conditions throughout the year and are expected to produce a good crop. Typically these nuts do not come to market until late November.

Looking at the estimated total supply for the 2015 marketing year, it is predicted to be very similar in total supply to the 2014 marketing year. Interesting to note, however, is that the long open position that we have experienced during the 2012 and 2013 crop years has been sold and the industry is moving into the 2014 harvest with no long open position on Fancy grade pieces. The longer open positions of the past two years were met with much cheaper pecan piece pricing during 2013 and 2014 marketing years in an effort to sell through those supplies. With a smaller position coming into the harvest and with the harvest predicted to be a small on-year crop, it will be interesting to see what happens with kernel piece prices during 2015.

China, along with the gift pack segment of the industry, is anxious for the first harvest to begin and China has been prebooking with growers for their first harvest. We are hearing reports that 40% of the Georgia crop has been prebooked to China already and China is still actively seeking the largest, highest yielding nuts available. The 2015 Chinese New Year is February 19th. While last year, the early nuts harvested had to be shipped by the third week of November, this year, with the later Chinese New Year, the industry has until the first week of December to have the nuts loaded and shipped.

China has certainly become a regular for all tree nuts and we ask ourselves the same question this time every year. How hungry is China for pecans and how much of the crop will they take? Below is a chart that shows inshell pounds shipped to China from USA ports on a crop year basis (October-September) since 2008. As you can see, their appetite can be tremendous but generally, they have taken between 60 and 80 million pounds on average. Time will tell what their overall interest will be for the 2014/15 crop but they are expressing great interest today.



We will continue to keep you informed as the crop continues to mature. While USDA did reinstate the October estimate for the 2014/15 crop, they will not provide any other estimates of the crop prior to their final reporting in July 2015.

If you have any questions or wish to discuss these estimates further, please give us a call at 800-469-6607.

Cordially,

Helen Watts
Executive Vice President

October 2014 report is listed below.

June 2014 report is listed below.