US Pecan Market Update, 28.09.2022
The September NPSA crop estimate projects a US crop of 304 million lbs. If accurate, this would represent a marginal increase from last year’s crop and signal an overall increase in pecan availability for 2023 with the majority of the estimated growth coming out of the Mexican crop.
Current Market Conditions:
Consistent consumption in the 2™ half of 2022 has led to a relatively stable market for the last two quarters. Cold storage numbers have decreased by 26 million Ibs. through the month of August (a considerable amount). The logistics situation continues to improve but has not normalized and still presents challenges.
Macroeconomic indicators are signaling a challenging business atmosphere for 2023, including increased food prices, a strong US dollar, and a challenging logistics situation. While high inflation and increasing global interest rates signal an economic slowdown, the relatively small size of the pecan crop, developed markets in which pecans are consumed (primarily produced and consumed in North America), and a general change in consumer habits allow for more consistent consumption when compared to other (larger) tree nut crops.
We expect a stable market through the end of the current crop with a possible delayed harvest due to extreme weather conditions (potential for early season frost damage and hurricanes).
Also, expect the spread to decrease for the upcoming season between halves and pieces. Due to a likely delayed harvest, we recommend that all buyers cover well into Q1 from the current crop. Logistics continue to be an issue and climate changes increasingly make harvest timelines less certain.