The pecan inventory numbers have been released by both the APC and the USDA and inventories are up for June when compared to last year.
Both the APC and the USDA released the pecan cold storage numbers for the month of June and the numbers show an increase in pecans in cold storage. The increased pecans in cold storage is not a big surprise as more pecan farmers have new orchards coming into production.
The surprise in the numbers lies in the details of the amount of shelled pecans in cold storage. While the in-shell pecans is expected to increase over time, we also expect the quantity shelled pecans to increase in proportion to the increase in in-shell pecans. That is not happening though, for the month of June we see that both the APC and USDA report a decrease in shelled pecans when compared to the same time last year.
This is important because this represents the number of pecans in the pipeline ready to be sent to purchasers, ingredients users, bakers, ect… This number is a good gauge for expected coming demand for pecans. When shellers carry more shelled product on hand it can represent an expected increase in demand for the shelled pecans.
There are of course exceptions to this rule of thumb. However, large pecans are not separated from their shell until they have a buyer ready to purchase them, with the exception of retail outlets. Pecans store best in the shell, this is why they are stored in-shell until buyers are ready to take delivery of the product.
The increasing in-shell pecans in cold storage, with a decreasing shelled pecan inventory, may be hinting to fears of a slowing market. This is only speculation of what may be coming in the future. For now the demand numbers look positive. The pecan shipment numbers continue to rise over last year and the commitments to ship continue to rise as well. However the decrease in shelled product may be signs that a slow down is looming.