The global pecan industry has been on a meteoric rise over the past decade with demand for America’s native nut, gaining global recognition as growers have set out to grab their share of the growing nut market.
US Pecan pecan growers have been traveling the globe spreading the pecan gospel in foreign countries for years and business has been good. Over the last decade US Pecan growers have visited a myriad of countries and attended numerous trade shows in order to display their goods to potential buyers.
China quickly became a market of interest and grew to the largest export market in a few short years. The onset of the US, China trade dispute came as a significant blow to the pecan industry and has yet to recover trade in China.
The last few years have been quite tumultuous in the pecan industry, but demand has continued to grow. With the domestic market being the driver for new growth the pecan industry has managed to replace the loss of their biggest trading partner by stimulating new growth right here at home.
While demand has continued to inch higher pecan deliveries from growers has continued to drop this year. Growers have continued to ask the question, why demand is increasing while purchases from growers have slowed. As we approach the new harvest season, pecan purchases from growers have fallen 12.6% globally.
A few larger, and less than reputable, pecan shellers in the US have long used the US and Mexican pecan markets against each other in order to drive prices down on the farm. If prices are trending too high in one market, the shellers would shift more purchasing to the other market in order to drive prices lower.
Now that the markets have much more transparency with our online reporting community, growers can see exactly how this strategy is playing out, almost in real time. To date pecan shipments are up 7.2% for the season with a total of 336,951,464 pounds being shipped for the season. This is 24,348,385 pounds more than last year at the same time, with shipments trending higher and commitments to ship trending higher one would think that farm deliveries would be keeping pace as well, but that’s not the case.
In fact, pecan deliveries from farmers are down. Deliveries from American pecan growers are down 7.9% for the season or 17,919,705 lbs. This has continued to push pecan prices on the farm to 5 year lows even as demand continues higher.
But foreign deliveries are also down, to date, deliveries from Mexican pecan growers have dropped 25.1% or 20,779,340 lbs. While pecan purchases continue to drop and shipments continue to rise, some claim that inventory is also rising. While that is possible with crop size expected to increase, the numbers for an increasing handler inventory don’t add up, and some growers have claimed the reported handler inventory numbers to be inaccurate.