July 22, 2013
The first two grower group estimates of the upcoming 2013/14 pecan crop have been released. The Tri-State Growers Association announced the first estimate in late June at 222 million inshell pounds. The Texas Growers Association is the second group to estimate the crop and their projection announced last week is 230 million inshell pounds. This crop represents an off-year cycle and is the shortest projected US Crop since 2008.
Now that the crop has set and the June drop has occurred, we will turn our focus to weather conditions throughout the summer and early fall. Not enough water, too much water, excessive storms are all factors we watch for every year and this one will be no different. The eastern US experienced two tropical depressions in May and June which is very early in the season and is highly unusual. It continues to rain almost every day in the east which could cause scab development if this persists. In the west, we hear a lot of concern over drought conditions and the far western states experienced record high temperatures in June.
To add to the unknown impact any weather conditions can have on the crop, USDA, due to budget cuts, will no longer produce a final estimate in July. So our industry from growers to shellers are faced with trying to determine the accurate size of a US crop that spans 15 producing states and of which a third comes from "casual" production….those that are not grown in orchard environment. Thru efforts by growers and shellers, we have been able to get USDA to reinstate some of the estimates and have been given feedback that they will estimate the crop in October and in January but will no longer provide the December or July reports. The good news is that we will receive some data from USDA but the bad news is that not having the final number which is acquired from growers and shellers through reporting of inshell sales and purchases, we will not have a good indicator of exactly what size crop we had. Unlike the almond and walnut industries who have marketing orders to help fund USDA reporting, our industry is dependent on individual grower groups and shellers on a voluntary basis to raise marketing funds. Young Pecan feels the value of USDA reporting is hugely important and we are hopeful that the Pecan Industry, both growers and shellers, can come together to raise enough dollars to fund additional USDA reporting. We feel this is very important to our customers as well and, as such, if your companies would have interest in participating in the fund raising, we would be happy to advise the National Pecan Shellers Association of your interest in participating.
Listed below are a couple of charts of interest. The first is a chart that shows the variance between the latest estimate and the final USDA number for each of the past six years. The second is a supply/consumption analysis based on the latest information from USDA and the latest estimate of the year.
|Texas Grower Estimate||324||193||324||292||257||282||230|
|USDA Final (July)||387||202||302||294||270||303*|| |
|USDA Final Variance to Estimate||+63||+9||-22||+2||+13||+21|| |
|*Based on last USDA produced estimate, March 2013|
|USDA Cold Storage C/O (10-31)||169||100||67||99||128||180|
|US Crop Sizes||202||302||294||270||303||230|
The Industry has experienced declining domestic consumption over the past two years which resulted in an oversupply of pecan pieces by end of 2012. This resulted in a historic gap between the sales price of a pecan half and a pecan piece. The much lower sales price of pieces is helping to jump start domestic consumption again and we are seeing increased shipments each month over the past two years. Pecan Halves have not experienced the same consumption loss and, as such, available supplies of halves ranging from extra large thru mammoth will continue to decline as we move through the higher demand periods of July-October. If this consumption trend continues, we expect to see an October carryout of approximately 180 million inshell pound equivalent.
The next estimate will be released in early September by the National Pecan Shellers Association and USDA will provide their first estimate of the crop in early October.
We will continue to keep you updated as we progress through the growing season. Should you have any questions or wish to discuss the market in more detail, please feel free to give me a call at 800-469-6607. Also, please be sure to check out our website at www.youngpecan.com where you will find additional statistics, nutritional and regulatory information. On our site, you can sign up to receive emails automatically as we update statistics and other information.
Executive Vice President