Update To The Trade


Update to the Trade
June 2014
 

The Tri-State Growers Association has announced the first estimate of the 2014/15 pecan crop at 256 million inshell pounds. This crop represents an on-year cycle and is the second shortest projected US crop since 2008 and by far the shortest on-year based cycle in many years.

Now that the crop has set, 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. Some of the reasons cited for the shorter on-year estimation centers around scab in the southeast and early freeze damage in the southwest. The southeast continues to see rain showers almost every day which increases the chance for scab development. In the west, we hear a lot of concern over drought conditions and the far western states have experienced record high temperatures over the past several weeks. We are also entering the "June drop" period when unpollinated and otherwise damaged nutlets will abort so over the next several weeks, we will be anxious to see the level of drop that occurs.

To add to the unknown impact any weather conditions can have on the crop, USDA, due to budget cuts, failed to provide good estimates of the 2013 crop but they have re-instated the final reporting number for the 2013 crop which will be announced in early July. They have further re-instated one crop estimate for the upcoming 2014/15 crop which will be released in October 2014. So our industry from growers to shellers continue to struggle with trying to determine the accurate size of a US crop that spans 15 producing states of which a third of the nuts produced come from "casual" production….those that are not grown in orchard environment.

Listed below are a couple of charts of interest. The first is a chart that shows the variance between the first estimate and the final USDA number for each of the past seven years. The second is a supply/consumption analysis based on the latest information from USDA and the first estimate of the year.


 

Crop Year20072008200920102011201220132014
Tri State Growers
USDA Final(July)
298
387
205
202
296
302
275
294
246
270
265
303
222
220*
256
 
USDA Final Variance
to Estimate
89-36192438-2

 
*Estimated        

Crop Year2008200920102011201220132014
USDA Cold Storage(C/O 10-31)
US Crop Size
MX Imports
169
202
128
100
302
130
67
294
120
99
270
100
128
303
152
139
220*
130*
122*
256
130*
Total Supply499532481469583489508
Consumption399465382341444367 
*Estimated       


While the Industry experienced declining domestic consumption over the past several years which resulted in an oversupply of pecan pieces by end of 2012, lower pecan kernel prices allowed for a rebound of consumption during calendar year 2013. While today, there is still an imbalance between inventories of halves to pieces, consumption momentum continues to improve and we expect to see a more normal balance of inventories of halves to pieces as we exit the 2013/14 crop year. If this consumption trend continues, we expect to see an October carryout of approximately 122 million inshell pound equivalent.

China continues to express interest in the remaining inshell pecans that are held by growers from the 2013 crop. From the 2012 crop, China imported 99 million inshell pounds from US ports. Thru April of 2014, China has imported 56 million inshell pounds from US ports from the 2013 crop. Part of the decline of imports from the 2013 crop is due to the long position from the 2012 crop that China still had remaining at the beginning of the 2013 harvest and with a shorter overall crop, China has been unable to acquire some of the larger sized premium inshell due to lack of supply.

The next estimate will come from the Texas Pecan Growers Association which meets mid July.

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.


Cordially,

Helen Watts
Executive Vice President