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Pecan Cold Storage Data Shows Increased Supply Capacity

The American pecan industry has been feverishly working to expand the current domestic global market for pecans both as a snack food and as an ingredient. The work started more than a decade ago when growers packed their pecans in a suitcase and began traveling the globe in search of new markets and new buyers. More than 12 years have now passed and their hard work is yielding benefits in the global marketplace. 

 

The growth in the industry as of lately has come from the newly found domestic demand. Several years back the pecan growers of America came together to form a marketing order to promote pecans locally in hopes of moving the domestic demand needle. This work too has begun to pay off for growers as domestic consumption is the largest portion of growth for the industry right now. 

 

As the trade dispute between China and the US has temporarily disrupted supply chains of pecan moving into China, the domestic consumption has continued to fuel growth in the industry. This is thanks largely to the American Pecan Council’s work in the domestic marketplace. 

  • high speed industrial pecan cracker

 

But things are looking up in China also. Even as the trade war has hurt US pecan sales into China over the past 2 years, the new phase one trade agreement is looking very positive for tree nuts. As China has committed to purchasing more than $50 billion per year in US ag products, with tree nuts expected to play a big role in the purchases. And with the latest announcement of reduced tariff applications for US ag products, Chinese importers and US exporters can apply to receive a reduced tariff on the US pecans entering China. 

 

One other major concern has been the capacity to supply the new growth in the industry, as pecans, unlike annual row crops, take around 7 years to come into commercial production. If the industry increases its demand by a mere 10% that would require an additional 60+/- million pounds of supply, not a number the industry can acquire overnight. But they are working towards it. 

 

As we monitor the current demand and cold storage holdings we see that demand is currently outpacing cold storage holdings, but not by a significant amount. Growers have managed to increase the supply capacity to keep up with demand enough to allow a smooth supply chain, so far. Cold storage holdings are trending up from last year at around 5.2% higher than last year. This is good news for suppliers who have contracts to fill with demand still outpacing the supply. We expect the next decade to continue to see higher and higher cold storage holdings as new orchards come into production across the southern US.Georgia and New Mexico are leading the way with new orchard plantings, but Georgia recently suffered a setback when Hurricane Micheal ripped through the largest pecan producing region of the world. The Georgia crop is expected to reach pre-Hurricane production levels this season or the next.