May 2021 Position Report shows pecans on the move

Since March, pecan industry members have reported that prices have slowly increased as handlers’ inventories dropped. The market also appeared to open up as vaccinations became more readily available. Producers in the Southern Hemisphere began harvesting their current crop in April; most have entered the final stages of harvest this month. Meanwhile, pecan growers in the Northern Hemisphere continue to scout for pests and diseases, irrigate their trees, and prepare for the water stage.

As the industry nears another harvest, the most recent position reports indicated that U.S. handlers continue to push to move pecans through the market. 

Inventory continues steady decline in May.

According to the May 2021 Position Report, the U.S. handlers’ inventory continued its downward trend in May and dropped throughout the month. This dip in inventory started in March. If the current year follows the previous two, then it will continue until right before harvest. 

The May 2021 Position Report stated that U.S. handlers held a total of 252.98 million pounds (inshell basis) in their inventory.

Total Inventory (inshell basis) for 2018, 2019, and 2020 crop years from Position Reports.

Another publication useful for analyzing current pecan inventory in the U.S. comes from the U.S. Department of Agriculture. The USDA NASS releases monthly cold storage reports showing the stocks of meats, dairy products, poultry products, fruits, nuts, and vegetables in public, private and semi-private refrigerated warehouses. The data is gathered through voluntary reporting. In the June 2021 report, USDA NASS states that 270.81 million pounds inshell basis (converted shelled by multiplying by “2”) sat in inventory as of May 31, 2021. Like the APC Position Reports, the current USDA NASS Cold Storage also showed a drop in total pecans in storage since April. 

The first data point in the May 2021 Position Report that reflects inventory’s continued decrease is “Pecans Received.” This number shows the amount of pecans U.S. handlers took in throughout the month. The May 2021 Position Report also included a year-to-date total for pecans received. According to the report, from Sept. 1, 2020, to May 31, 2021, handlers have brought in a total of 286.93 million pounds (inshell basis). This total was 29 percent higher than that for the same period in the 2019-2020 crop year.

This increase can be attributed to a larger crop nationwide. According to the USDA’s Noncitrus Fruits and Nuts Summary from May 2021, Georgia and New Mexico produced 147.5 and 78.8 million pounds respectively. 

These numbers come from the American Pecan Council’s monthly Pecan Industry Position Reports.

The May 2021 Position Report also showed that U.S. handlers continue to purchase fewer pecans outside the country. According to this report, U.S. handlers purchased 1,830,672 pounds (inshell basis) from Mexico in May. Imports of Mexican inshell pecans from September to May were reportedly down 50 percent from the previous crop year.

Although U.S. handlers continue to bring in fewer pecans from Mexico and the total pecans purchased outside of the U.S. has steadily decreased, the May 2021 report indicated that handlers turned to other production areas for pecans. Year-to-date purchases of pecans from Australia and Argentina have both increased. According to the most recent Position Report, U.S. handlers have bought a total of 2.61 million pounds (inshell basis) from Argentina from Sept. 1, 2020, to May 31, 2021. This number went up 5,388 percent from that same date range in 2019-2020. 

May 2021 shipments remain above previous crop year levels. 

Working with a larger crop in 2020-2021, U.S. handlers continued to outpace previous shipment levels throughout May and April. According to the May 2021 Position Report, U.S. handlers shipped 34,700,730 pounds (inshell basis) throughout the month. Shelled meats shipped to retail stores, groceries, or outside the U.S. showed an increase in May. The number rose about 40 percent since April. Compared to May 2020, shelled shipments to retail or grocery stores in May 2021 saw a 79 percent increase.

Net Shipments (inshell basis) for 2018, 2019, and 2020 crop years from Position Reports.

The year-to-date total for pecan shipments remained above that of the last crop year. The May 2021 Report also shared that this total was about a 142 percent increase from the previous year. 

Total Commitments (inshell basis) for 2018, 2019, and 2020 crop years from Position Reports.

Looking at commitments to ship, the May 2021 Position Report showed that total commitments saw a slight jump, with U.S. handlers reporting 205.78 million pounds (inshell basis). Total commitments have shown several ups and downs throughout the current crop year. Over the previous two years, this number started to show a downward trend after March. The 2020-2021 graph for total commitments broke this pattern.  

Another important value for analyzing commitment and inventory is the Net Open Position. The Net Open Position reflects the number of pecans in U.S. handlers’ inventories available for purchase at the end of the reporting month. In May 2021, this number decreased after a sharp rise in April. According to the May report, the number of available pecans at the end of May was 47.20 million pounds (inshell basis), a 37 percent decrease from May 2020’s Net Open Position. 

A relatively new data point, the Net Open Position tells the number of pecans held in U.S. handlers’ inventories that are not committed and are available for sale.

The Net Open Position is relatively new data included in the APC’s reports. The 2019-2020 crop year was the first year to have the Net Open Position reported each month. This number can be considered a reflection of U.S. handlers’ cold storage, specifically, the pecans that have not been committed within storage. 

Monthly versus year-to-date export data show a complex story 

After a sharp rise in March, total exports dipped in April and almost leveled out in May. U.S. handlers reported a total of 8,223,584 pounds (inshell basis) for exports in May. 

Much like with the January 2021 Position Report, this recent monthly total and the graph itself may cause one to presume that exports for the 2020-2021 crop year are lower than previous years. But the year-to-date totals show that isn’t the case. According to the May 2021 position report, 95,163,158 pounds (inshell basis) were exported by U.S. handlers from September 2020 to May 2021. In comparison, U.S. handlers reportedly exported a total of 82,564,843 pounds for that same period in the 2019-2020 crop year.  

Total Exports (inshell basis) for 2018, 2019, and 2020 crop years from Position Reports.

The country-by-country data also indicated that exports are on the rise for certain regions. Total exports (inshell basis) to China from the beginning of the current crop year to May reached 35,124,123 pounds. In comparison, U.S. handlers shipped 16,566,366 pounds (inshell basis) to China for that same period in the 2019-2020 crop year. The May 2021 Position Report also showed year-to-date exports for South Korea, India, and the United Kingdom increased this crop year.

The May 2021 Industry Position Report showed that although reported inventory continued to reflect a larger crop, shipments remained above previous levels as U.S. handlers moved nuts through the market. Reflected in the Net Open Position, total commitments in May also exceed previous years’ levels. 

How this data shifts in upcoming reports will influence industry expectations for the market during harvest. Producers and industry members currently do not anticipate as large a crop this coming season. Georgia is expected to be in an “off” year after many growers decided not to crop thin their trees and gathered as many nuts as they could last harvest. Oklahoma endured multiple freezes over the last year; the most recent ice storm hit in April during pollination and already impacted the state’s predicted production. New Mexico and Texas both appear to be developing a good crop, but both states combat their own challenges. Growers in the West and Mexico continue to combat an ever-worsening drought and water issues. And, of course, hurricane season is in full swing, representing a threat to all Southeastern producers.

The June and July Position Reports will provide growers and industry members insight into handlers’ positions before the 2021-2022 harvest kicks off. The American Pecan Council generally publishes each monthly report at the end of the following month; so, the June Report will most likely be released at the end of July. 

The complete April and May 2021 Position Reports can be found at AmericanPecan.com. These reports are subject to updates and revisions as more handlers submit forms and APC staff and USDA review data.