USDA sees smaller crop as the benchmark kernel price stabilizes  

October 16, 2023

The assessed Fancy Jr Mam H price leveled in the global pecan market during the week ending on Friday following a prior-week fall as the USDA estimated an 11% year-on-year drop in U.S. pecan production.

Fancy Jr Mam H traded at $4.50/lb CIF Europe for January to March shipment and was offered multiple times at $4.35-$4.55/lb FOB Texas equivalent levels during the October 7-13 assessment period, with bids from $4.30-$4.35/lb FOB Texas equivalent levels. The item was assessed at $4.35/lb FOB Texas, unchanged on the week.

The item shed 12 cents/lb during the prior assessment period as shellers competed for limited, early 2023 crop demand from Europe. U.S. buyers were largely inactive in new crop kernel trade. Several shellers said they were refraining from offering until they have more clarity about the size and quality of the upcoming crop and the price of new crop inshell.

“I have clients asking for prices, but I’m requesting them to hold off for another 30 days until we see the crop,” a Mexico-based sheller said on Thursday.

Prices for new crop pieces remained at premiums to Fancy Jr Mam H. A half load of Fancy Med Pcs traded at $4.70/lb FOB Texas and was assessed at the same level. No 2023 crop trades were reported for Fancy Lge Pcs, though the item traded at $4.50/lb FOB Texas for product shipping from the 2022 crop.

In the coming months, pieces were expected to remain in short supply relative to halves and keep their price premiums to halves. However, a poor-quality crop from the U.S. and Mexico could alter those expectations. Lower crop quality typically results in an increased supply of pieces and fewer halves.

Inshell market

Assessed Desirable IS and Stuart IS prices rose on continued demand from China, though the assessed W. Wichita IS price declined.

Desirable IS traded at $1.90/lb FOB Georgia with bids at $1.85/lb FOB Georgia and $1.90/lb FOB Georgia. Stuart IS and Stuart Blend IS traded multiple times from $1.65-$1.70/lb FOB Georgia, with the preponderance of trade at $1.70/lb FOB Georgia.

Demand from China persisted during the assessment period. In recent weeks, buyers from China have purchased from 12-15 million lbs of inshell from Mexico and the U.S., two inshell traders estimated.

Chinese demand has been driven partly by a shorter crop in South Africa, which appears to have prevented some sellers there from shipping booked volume to China. “Their inventories are extremely low,” a U.S.-based sheller said on October 10. “They’re trying to replenish their inventories as well as make up for the loss of contracts in South Africa.”

Multiple inshell varieties traded during the period. Giftpack buyers purchased Pawnee IS at $4.20/pt FOB Georgia.

In Sonora, Mexico, meat yields and kernel size from newly harvested Wichita IS were down, sources said. Sonora-origin Wichita IS meat yields are usually at 58% but early receipts showed 56% yields. As a result, buyers in China were renegotiating contracts booked earlier with sellers in Mexico, the Mexico-based sheller said. No further details were known.

USDA forecast

U.S. pecan output from the 2023 crop will reach 248 million lbs, down 11% from 278 million lbs last year, according to the Crop Production report released on Wednesday by the USDA’s National Agricultural Statistics Service (NASS).

The report estimates that production from Georgia will decline by 20%, from 132 million lbs to 105 million lbs. In August, Hurricane Idalia swept through parts of Georgia’s pecan-growing region.

“Improved varieties are expected to produce 234 million pounds or 94 percent of the total,” the report said. “The native and seedling varieties are expected to produce 13.8 million pounds, making up the remaining 6 percent of production.”

The report estimates production from Georgia, New Mexico, Arizona, Texas, and Oklahoma – the top producing states. Separate forecasts from industry groups include additional states. Most of those forecasts have put the U.S. crop from 295-322 million lbs.

The next pecan production estimate from NASS is scheduled for release in December.