USDA pecan cold storage holdings show pecan inventory in the US has had an increase of 3.1% year* to date when compared to the same time last season. Last year’s data showed the significant losses in hard hit areas like Georgia but also the increased plantings and production in areas like New Mexico. First quarter numbers for the season (Sept – Dec) show an average increase of 1% in overall pecans in cold storage, while Jan thru Feb have shown a 7% increase over last year at the same time.**
The more interesting data is the handler inventory published by the American Pecan Council. The American Pecan Council is now publishing handler data on a monthly basis, giving industry a much better snapshot of current demand and supply, with a hint into the short term future demand for pecans.
When we look at handler inventory for the same time period we see that handler inventory YTD is up 0.4%, but more interestingly around December inventories for handlers began to drop significantly. Almost as if handlers around the US stopped buying all together. This would of course signal an abrupt decrease in demand, but that may not be accurate.
When we look at overall inventory YTD we see that inventory is still slightly up, but in November handlers quit buying as much product. The real litmus test comes from comparing all the data. Along with “handler inventory”, we also see “commitments to ship” and this number is very positive. When looking at season to season year to date number for the commitments to ship we see a whopping 23% increase from last year’s record setting shipments. This is very positive news for the demand side of the equation, however it may not be all good news. While Q1 is up 30% from last year and the first part of Q2 is up 10%, we see that overall inventory has only risen an average of 3.1% from year to year. This could leave a supply gap for future shipments. While we do have substantial inventory in the warehouses currently, demand is still outpacing supplies in the US and this could eventually lead to a shortage that will take 6-8 years to fill. Unlike annually planted crops, pecan production is increased only after an average 6-8 years after initial planting.
*Pecan season is from September to August
**USDA February Cold Storage holding numbers are subject to change with next month’s publications issuing the final corrections. Corrections are usually less than 3%. See the “reports” section on our website for full USDA Cold Storage Reports.