The American Pecan Council recently released the latest year end inventory report showing grower deliveries to supply chain jumping by an impressive 35.58% over last year. The growing consumption in the US coupled with decade low farmgate prices has sent deliveries soaring as buyers take advantage of lower prices and rising consumption.
China is also reentering the American Pecan market and is buying more in-shell than in the past two year bringing positive news to the exports, without China exports would have seen a decline this year, but with the reduction in trade tariffs available China has again started buying pecan from the US.
Handler inventory has shrunk, slightly down by only 2.66% over last season. One concerning note is the reduction in the WIP. The APC reports on the amount of halves, pieces, and Work in Progress. The Work in Progress has dropped by 30% showing less product being processed for shipment.
For now demand continues to soar, the season finished off with shipments up 24.18% over last season. That is an increase of 90.6 million pounds, a huge increase in such a small market. To put that in perspective growers in the US have delivered on average 292 million pounds per year over the last five season. That increase in consumption is a little more than a third of the total US pecan production. WIth these kind of increases supply capacity could become an issue if these types of demand increases continue, which is what is expected.
Growers are working diligently to plant more acreage and replace old varieties but it may not be enough to keep up with the huge increases in demand.