Handlers have been purchasing fewer pecans in the first quarter of the new season putting strong downward pressure on farmgate pecan prices, while pecan shipments continue strong.
The pecan industry has been growing over the past decade causing growers, buyers and brokers to scramble for position in the expanding market while causing price fluctuations in farmgate pecan prices.
Currently farmgate pecan prices are hovering in the dollar fifty to dollar seventy range which is significantly lower than the opening market with prices in two fifty range and expected to climb. Those early market hopes were quickly destroyed when prices dropped to currently levels.
Buyers have been largely absent in the market other than a few sales where bargains can be had. The lack of purchasing has pushed handler inventories to trend about 57 million pounds below first quarter of last season, while at the same time pecan shipments are trending up about 4.1%.
The economics would suggest that pecan prices would be higher but that is currently not the case. Many pecan growers have opted to go straight to cold storage and not sell into the lower bear market. Offers have been slightly increasing as more growers refuse the bargain basement pricing.
With inventories trending lower and shipments to end users increasing, supply chain worries increase as the raw materials (in-shell pecans) dwindles lower. If supplies get to low it could cause disruptions in on-time deliveries and steady supply to end users, the last thing anyone wants.