San Saba Pecan Market Update

November 2016

Supply Picture:

The North American pecan supply is currently projected as follows:

Projected US Crop: 275 million lbs.

Projected Mexican Crop Imports: 130 million lbs.

Projected 2015 crop Carry-in: 130 million lbs.

Compiling these numbers, total supply should be approximately 535 million lbs. However, it’s important to note that the entire carry-in is already sold reducing the amount of pecans available in 2017. Due to current conditions in both domestic and international markets, we expect supply to be tighter than originally forecasted during the 2017 crop year.

Crop Quality:

The US pecan harvest is later than usual due to warm and dry weather. Because of that delay, many growers are just starting to harvest or anticipating a December harvest date. Early reports on quality are mixed, with smaller than anticipated volume in central US growing regions. Managed orchards seem to be producing high quality pecans, but overall crop numbers are down from original forecasts.

Current Market Conditions:

The crop isn’t materializing as initially predicted. Several states are reporting smaller than originally predicted crops. The Mexican crop also has quality and volume problems. These factors and intense demand from the Chinese market have led to strong initial prices. There are still buyers looking for first available new crop, but many have already booked.

Market Forecast:

Due to lower than forecasted volumes, off quality, and late harvest dates; we are projecting prices to stay strong. Demand has been very high and many buyers still need to source first available new crop. Combining these factors, it’s likely that prices will strengthen through the fourth quarter. If the crop materializes as initially predicted, it’s possible that prices could decrease or even form a two-tier market during the first quarter of 2017 (based on quality). However, early harvest indications and demand signal a market that will strengthen throughout the year as supply decreases.

We will continue to send updates on all pecan developments as we move through the harvest.

The San Saba Team