Pecan Market Update 2018
While we wait for the latest Pecan numbers (Cold Storage, Receipts, and Consumption) to be announced early next month, here are some observations:
• There is roughly the same saleable tonnage as last year
• Prices are currently down about 15% over last season’s high and about 8% over last season’s average price.
• The downward price trend is more to due to a lack of money then it is a lack of demand which has been off slightly over last year. All the major packers have refrained from getting into a bidding war over the inshell. It was a bidding war last season that precipitated a price spike and a subsequent price collapse when the shellers ran out of the cash needed to buy the remainder of the crop. It would be fair to say that most pecan producers lost or made very little money last season.
• The market today is under bought and under sold. The big shellers are telegraphing to the industry that the market is at a bottom. My observation from past seasons is that the Jan-March timeframe is traditionally the weakest period of the season. In the first calendar quarter, there are minimal carry charges accrued to the base price. I expect that the market bottom will be reached in the the next three months.
• Given the lower prices this year, demand should increase. Currently, prices are in a range of the prior three seasons from last year. Industry sales may be aided by the weakened US dollar which is at a four year low to the Euro.
Look for the 2018 season market bottom in the next three months. Prices have dipped into a range that has recent historical support.