Pecan shellers, brokers and middle men place downward pressure on the in-shell market as demand for American pecans continues to rise.
Pecan growers of America banded together over the last years to mandate audited reporting of all pecan industry participants in order to forgo reliance on sheller propaganda that continued to preach doom and gloom to grower inquisitions about market demand and oversupply.
With the availability of audited data from the industry also came transparency of supply and demand in the industry replacing fiction with fact. But that doesn’t mean shellers are going down without a fight this season. As the export market for in-shell has shifted largely to Mexico, American growers are more dependent upon shellers and their network of accumulators to sell their pecans.
With their regained power in the market, shellers have been quick to find ways to pressure the in-shell market prices downward.Pecan purchases in the last two months have fallen by nearly 100 million pounds when compared the same time last year. When we look at the data we see that sheller purchases have slowed significantly since October as shellers utilize inventory.
With the significant decrease in purchases we might be inclined to speculate that demand for pecans may be slowing and too much inventory is in the market. However that seems unlikely. As we track demand from last year into this year we see that demand is again on course to set a new record high. Last year demand reached record highs with domestic consumption being the driver behind the new found growth. When we compare year over year data, we see that shipments are again setting new records for the highest demand ever recorded with shipments up 4.3% over last year.
But what about future demand, has the market hit a wall with Covid-19, and demand plummeted. Not as of the latest reports. In Fact the future demand, “commitments to ship” is even higher. The latest month shows an increase of 3.4%, but when we look at a snapshot of the entire season we see that commitments to ship are up an average of 20.4% for the season. As the market
As the season continues to unfold we will track the data very closely to see what effects, if any, the Covid-19 pandemic is having on the pecan market. Some were quick to speculate that the pandemic would slow demand, however, so far we have seen growth continue in the current demand as well as the future demand. But with inventory on hand shellers will be able to supply that demand at least until later in the year, and growers may have to hold onto product a little longer until shellers get desperate to fill orders.
*All data is converted to in-shell unless otherwise noted.
**Handler purchase data is listed monthly without corrections from the APC. The American Pecan Council makes corrections to data throughout the year without notice. Monthly totals are shown for reference however when compared to APC totals there is a 4.1 million pound discrepancy in the data. Monthly totals listed above total 251,482,429 and cumulative totals from APC equal 255,650,826 equaling a 4,168,397 difference. Without corrections from the APC monthly data can not be updated accurately. Using cumulative totals from March data shows overall purchases down 13.2% YTD.