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Demand for Pecans May be Too High

With a 525,485,734 pound supply deficit, the pecan industry may have trouble filling current contracts.

Increasing demand for pecans is exactly what the American Pecan Council set out to do, when it was formed several years ago. The grassroots effort took some time get off the ground, but pecan growers in the US could see the need for increasing demand for their pecans. With an office in Dallas, Texas and a full staff, the American Pecan Council has achieved many of the goals it has set out to complete. One of the goals, was for the APC to develop a marketing strategy so as to ultimately increase use and demand for pecans from the United States. But that goal may be increasing demand at a pace that supply can not keep up with. Pecans can take anywhere from 7 to 10 years to come into commercial production once an orchard is established. The time between planting and actual harvest is a longer process than most crops and requires long term planning and patience. With new pecan growers entering the market, and existing pecan growers planting new orchards, the pecan growers in the US decided to form a marketing order to help create demand for the increasing crop. However, that demand may be too much for the available supply capacity of the world currently. To date the APC has reported shipments of 221,609,674* lbs (C2i) for the last 8 months of reporting. This number may not sound like a lot when compared to other tree nuts, however when you take into consideration that the US typically produces around 300 million pounds per year you can see how the supply capacity is getting stretched thin. Even more important than the current shipments is the current commitments to ship. Over the last 8 months the US Pecan industry has committed to ship 1,042,086,408 lbs (C2i) of pecans. The difference in shipments and commitments to ship currently stands at 820,476,734 of pecans that have been committed but that have not been delivered yet. This of course is good news for growers and shellers with pecans to sell, however concern is growing as to where the pecans will come from to fill these orders. The USDA reports pecan cold storage holdings at 294,991,000 (C2i) for the end of April 2019, this of course will help fill the supply gap, but this still leaves a deficit of 525,485,734 lbs, or about 50% of the total commitments with no immediate supply source. The pecan industry is struggling to keep up with the demand and may need to start looking for more precocious varieties in order to keep up with the fast growing demand for pecans.

 

*Source(s) – United States Department of Agriculture National Agricultural Statistics Service (NASS), American Pecan Council Monthly Pecan Position Report.

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* It is important to note that data contained in the American Pecan Council Monthly Pecan Position Report is subject to change without notice.

*C2i – Converted to In-shell using a 50% meat yield.