The American Pecan Council was formed nearly four years ago and growers now have questions about the data being published to the industry. As pecan harvest begins across the various parts of the southern US, pecan growers naturally become more involved in keeping up with current market conditions such as pecan prices, demand for pecans, and how the crop is shaping up for this year’s harvest.
Over the last couple of years, growers have been able to get a more accurate picture of the market conditions via audited data published monthly by the American Pecan Council. The data has been a real eye opener for the pecan industry who previously only had far less information to work with to gauge market activity. Now with a global pecan price database, along with supply and demand information reported monthly, the pecan industry has a much more accurate picture of the market.
Over the past few weeks we have received multiple comments and questions about the current market conditions and why we have reported pecan demand is up over last year’s numbers. After a couple of conversations we realized that not everyone is reading the reports in the same way, and that our “language” is hard to understand at times.
Understanding Pecan Shipments Data
In the monthly reports, pecan shipments are usually the first category and look like the image below:
You will notice that shipments are conveniently broken into two categories: 1. Inshell Pecans and 2. Shelled Pecans. When we talk about shipments, many time we will combine these two categories with some simple math in order to look at all pecan shipments as a total.
The math formula to accomplish this task is as follows:
When we combine these two data sets we can see the overall shipments of pecans from the first handler to a customer. First handlers can be shellers, growers, accumulators, speculators, re-sellers, ect…. Some confusion arises when reading the published data, for example we recently reported that pecan shipments are out pacing last year and that demand is up 7.8% over last year, while this is true according to the data, some viewers asked why the reports show pecan shipments down for the year, and that is a good question.
The reason for this misunderstanding is derived from the Inter-handler Transfers. In the shipments report under the categories heading of both Shelled Meats and Inshell you will see 3 line items each with their own data set: 1. Retail / Grocery / Export , 2. Inter-handler Transfers Shipped 3. Inter-handler Transfers Received, and then the totals of each category.
The latest report as of today is the APC Pecan Position Report July 2020 , in this report the total numbers listed at the bottom show a decrease in Total Shipments for the season
However this is actually misleading in a way. Inter-handler Transfers of pecans both shipped and received is useful information for the pecan industry, however for certain purposes it is largely irrelevant and can be misleading. Inter-handler transfers are simply the pecans moving from one handler to another or more simply put movement in the supply chain.
The important data to look at when determining pecan shipments and actual demand for pecans is to look at the Retail / Grocery / Export data. This line item show the pecans moving from the pecan industry to an actual end user, where it will be used as an ingredient, repackaged, or otherwise made ready for consumption and will not enter our reporting data again.
By and large most viewers would be better served to completely ignore the Inter-handler Transfers and the resulting totals below unless you are interested in the movement of the pecans through the supply chain and are keeping tabs on accumulator volumes. Viewing the Retail / Grocery / Export data gives a much clearer picture of pecans delivered to end users by the industry.
As you can see in the image below, Total Shipments shows a decrease of 18.3% or a decrease of 35,787,366 lbs for the season, however when you ignore the Inter-handler Transfers and look at pecan shipments from industry to pecan customers we see that demand is outpacing last season by 7.2% an increase of 24,348,385 lbs. While exports are down, the domestic consumption has continued to drive growth for the year.