Pecan buyers have become more active in the wholesale market this week but many growers are sending their crop straight to cold storage. While key producing areas such as Texas are showing signs of a much smaller crop throughout the state.
Pecan growers in the wholesale market have offered little pecans for sale this year as farmgate pecan prices fell sharply after a strong early market open.
Early market varieties opened firm this year with export contracts sitting in the $2.50-2.60/lb (in-shell) range. Prices quickly tumbled as lower offers began coming in and a small handful of growers began selling. Offers continued drop but have hit resistance and most growers have now stopped accepting offers sending pecans going straight to cold storage.
Pecan inventories in the wholesale market have 5 year lows and the lowest ever reported by the industries federal marketing order. According to current supply and demand figures the industry has around 3 months supply until it runs out. This is what many growers are expecting will put upward pressure on the market.
Another important factor this year is the lower production levels in key areas such as Texas. Texas pecan growers have experienced severe drought this year during key nutfill stages of the growth cycle resulting in significant crop loss in areas across the state.
Georgia has a good crop this year but areas of southern Alabama have also seen total crop loss. Oklahoma is expected to produce an average to below average crop leaving only the western states to help fill the supply gap.
With pecan inventories dwindling fast buyers may have no choice but to increase current offerings or risk running out of supply. Imports from Mexico are still down as growers there wait for the market to recover. Current pecan imports from Mexico stand at 69,330,000 for the season.