Pecan handler inventory is down just under 16% as growers hold on to in-shell reserves pressuring handlers to increase bids for pecan stocks.
The pecan industry has seen significant growth over the past decade. Pecan growers around the US have banded together to create a more transparent and active industry with growers from all of the states giving time and money to move the industry forward past the days of stagnant demand, misrepresentation, and shady, broker rhetoric.
Since nearly a decade ago pecan growers have been dusting off their passports, packing their suitcases, with clothes and pecans, and hitting the road in order to educate the world about pecans, their uses and overall health benefits. With the exception of a currently ongoing trade war, business has been good for pecan growers looking to open up new markets.
Beginning with the US Pecan Growers Council, American pecan farmers formed several organizations in an effort to move the needle in the pecan industry. In 2016 growers were able to officially pass the federal marketing order forming the American Pecan Council to oversee the marketing and research for American Pecans. Still not satisfied, growers took another step to ensure pecans would have adequate representation in Washington DC by forming the National Pecan Federation to represent pecan growers interest concerning important legislative matters.
Along with research and marketing growers tasked American Pecans with reporting of official industry position papers representing a snapshot of the industry holdings, shipments and commitments to ship among other information. As the industry has been reporting monthly for over a year now, growers are able to use their data to assess current conditions in the market.
On Tuesday we reported on the “commitments to ship” from the latest report showing a surge of just over 15% when compared to last year’s record high shipments. As we dig further into the numbers we see that pecan handler inventory is down almost 16% compared to the same time last year.
When looking at the industry position report for December 2018 we see that handler inventory was at just over 217 million pounds. However, when we compare that to the December 2019 report we can see that current handler inventory sits at just over 183 million pounds representing a decrease of almost 34 million pounds or 15.6% decrease from year to year.
While it is early in the season and harvest is all but wrapped up, it would seem that growers are holding onto pecan stocks in hopes of higher bids. Many growers elect not to sell their pecans during the harvest rush season of October – January, and instead send their pecans to the freezer and wait for a more opportune time to sell.
As the season has progressed packers are reporting lower inventories, but with positive demand for the near future. While shipments to date have dropped 4% compared to last year, but the commitments to ship is showing positive signs of strong future demand. As mentioned in our Tuesday report, Commitments to Ship have increased over 15% when compared to the same time last year.
With inventories dropping and future commitments surging, growers with pecan stocks in the freezer will likely have packers and shellers knocking on their door sooner than later. The January report will be published near the end of this month and will give us better insight as to how the market demand and supply is shaping for the season.