PECAN MARKET IN 2010
AND OUTLOOK FOR 2011
Jose G. Peña,
Professor and Extension Economist-Management
g
Texas AgriLife Extension Service
Uvalde, TX
2011 Southeastern Pecan Growers Association
104th Annual Convention
Beau Rivage
Biloxi, MS
February 25 & 26 2011
1
PECAN MARKET IN 2010 AND
OUTLOOK FOR 2011:
Pecan Supply/Demand Situation
 Production, carry-in stocks, supplies

Imports and Exports-Exports
Exports Exports to China

What is the Market Offering?

Industry at Critical Crossroads

Domestic vs
vs. Exports
2
U.S. PECAN PRODUCTION
1990--2010
1990
AVG.
281
2000--2010 AVG. 257
2000
¹ Source: USDA-NASS, Noncitrus Fruits and Nuts 2010 Preliminary Summary, January 21, 2011
3
PECAN PRODUCTION
AVERAGE 2009 - 20101
Native/Seedling
Improved
TOTAL
12010
Mil. Lbs
51.3
229
229.5
280 8
280.8
18%
82%
100%
Preliminary estimate
4
U.S. PECAN PRODUCTION AND COMPOSITE FARM PRICE
2000
000 - 2010
0 0
¹ Source: USDA-NASS, Noncitrus Fruits and Nuts 2010 Preliminary Summary, January 21, 2011
5
6
U.S. PECAN DOMESTIC CONSUMPTION
(IN(IN
( -SHELL BASIS)) 1977
1977--09
Million Pounds
’01-’09 AVG
305
Source: Fruits and Tree Nuts Situation and Outlook Yearbook/FTS/October 2010
Economic Research Service/USDA
7
IMPORTS
AND
EXPORTS
8
PECAN IMPORTS & EXPORTS, ININ-SHELL EQUIVALENTS
2000
2000--2010
2010, (CALENDAR YEAR)
Million Lbs.
Source: USDA‐FAS
February, 2011
9
MEXICO
10
PRODUCTION AND DOMESTIC CONSUMPTION IN MEXICO
1994--2010
1994
Million Pounds
Source: September 2010 Mexico Tree Nuts Annual Gain Report (MX 0063), USDA-FAS
MY-Marketing Year (Oct.-Sept.)
11
NORTH AMERICA
TRADE ZONE
12
AVERAGE ANNUAL PECAN PRODUCTION, 20012001-2010
East vs
vs. West
Average Production 2001-2010: 421.7 Million lbs
1Eastern
States - Alabama, Arkansas, Florida, Georgia, Kansas, Louisiana, Mississippi, Missouri North Carolina, Oklahoma and South Carolina
States – Arizona, California, New Mexico and Texas
2Western
13
PECAN IMPORTS & EXPORTS BY COUNTRY,
IN--SHELL EQUIVALENTS AVERAGE, 2007 - 2010
IN
IMPORTS
2007-10 Average: 161.6 Million Lbs.
1 Other:
Australia, South Africa, Peru, Israel
Source: USDA-FAS, February ,2011
EXPORTS
2007-10 Average: 134.4 Million Lbs.
2China,
Hong Kong and Vietnam
14
EXPORTS
TO CHINA
15
PECAN EXPORTS TO CHINA/HONG KONG
AND VIETNAM, 20022002-2010
IN--SHELL (SHELLED CONVERTED TO IN
IN
IN--SHELL) (CALENDAR YEAR)
Million Pounds
Source: USDA‐FAS
February, 2011
16
PECAN EXPORTS, COMPARING 2009 TO 2010
IN--SHELL EQUIVALENTS
IN
2009
TOTAL: 143.5 Million Lbs.
1China,
TOTAL: 146.7 Million Lbs.
Hong Kong and Vietnam
Source: USDA-FAS, February ,2011
17
U.S.. PECAN E
U.S
EXPORTS
XPORTS TO ASIA1; BY MONTH 2010
IN--SHELL EQUIVALENTS (MILLION POUNDS)
IN
Million Pounds
1Hong
Kong, China and Vietnam
18
U.S. PECAN E
U.S.
EXPORTS
XPORTS BY MONTH 2010,
IN--SHELL EQUIVALENTS (MILLION POUNDS)
IN
Million Pounds
Total Exports: 146.6 million pounds
19
U.S. PECAN IMPORTS/EXPORTS FROM MEXICO
U.S.
BY MONTH, 2010, ININ-SHELL (MILLION POUNDS)
Million Pounds
Total Imports: 193.4 million pounds
Total Exports: 32.2 million pounds
20
PECAN EXPORTS TO CHINA, BY COUNTRY -2008
IN--SHELL EQUIVALENTS
IN
Q
TOTAL: 56.8 Million Pounds
21
DEMOGRAPHICS OF CHINA
Population: 1.3 Billion (2007)
(80 cities with more than 1 Million +)
 Middle Class: 260 Million (20%)
 Gross Domestic Product (2006):
$3.42 Trillion U.S.D. (4TH)
 Per Capita (Nominal): $2,034
$
U.S.D. (107TH)
 All Products: China is 3rd Importer;
p
2nd Exporter
p
(Source: Wikipedia)

NOTE: U.S. middle class, about 60% of population
22
U
U.S.
S CHINA EXCHANGE RATES
2007
20101
% Change
Ch g
$1 : 7
7.80
80 Yuan $1 : 6.83
6 83 Yuan
- 12%
1January
2011 - $1 : 6.61
23
MARKET
SITUATION
24
U.S. IMPROVED AND NATIVE PECANS, 20002000-2010
PRODUCTION AND AVERAGE PRICE RECEIVED (IN(IN-SHELL)
Million Pounds
Cents/Lb.
387
339
282
302
280
260
207
210
173
186
202
¹ Source: USDA-NASS, Noncitrus Fruits and Nuts 2010 Preliminary Summary, January 21, 2011
25
Pecan CarryCarry-over Stocks, InIn-Shell 1997
1997--2010
End of September
Million Pounds
USDA‐NASS, Cold Storage Report, January 21, 2011
Stocks as of September 30
26
U.S. PECAN PRODUCTION, STOCKS & PRICE, 20002000-2010
IN--SHELL BASIS
IN
¹ Source: USDA-NASS, Noncitrus Fruits and Nuts 2010 Preliminary Summary, January 21, 2011
27
U.S. PECAN PRODUCTION, STOCKS, IMPORTS & PRICE
2000
2000--10 – IN
IN--SHELL BASIS
Million Pounds
Cents/Lb.
582
525
464
581
544
475
436
446
474
548
479
¹ Source: USDA-NASS, Noncitrus Fruits and Nuts 2010 Preliminary Summary, January 21, 2011; Imports 2010
estimated based on FAS January-November 2010 report, USDA-NASS Cold Storage Report, January 21, 2011
28
COMPETITIVE
TREE NUTS
29
U.S. ALMOND AND WALNUT PRODUCTION,
2000--2010
2000
Billion Pounds
¹ Source: USDA-NASS, Noncitrus Fruits and Nuts 2010 Preliminary Summary, January 21, 2011
30
U.S. TREE NUT PRODUCTION, 20002000-2010
MACADAMIA,
MACADAMIA PISTACHIO,
PISTACHIO ALMOND,
ALMOND HAZELNUT,
HAZELNUT WALNUT AND PECAN
Billion Pounds
Cents/Lb.
¹ Source: USDA-NASS, Noncitrus Fruits and Nuts 2010 Preliminary Summary, January 21, 2011
31
PRICE COMPARISON
PECANS
ALMONDS
WALNUTS
32
AVERAGE PRICES FOR ALMONDS, WALNUTS AND PECANS
2000 - 2010 (IN(IN-SHELL BASIS)
Cents/Lb.
¹ Source: USDA-NASS, Noncitrus Fruits and Nuts 2010 Preliminary Summary, January 21, 2011,
Pecan price based on composite price
NOTE: 2010 Walnut prices not published
33
AVERAGE PRICES FOR ALMONDS, WALNUTS AND PECANS
2000 - 2010 (FARM PRICE SHELLED BASIS)
Cents/Lb.
¹ Source: USDA-NASS, Noncitrus Fruits and Nuts 2010 Preliminary Summary, January 21, 2011,
Pecan price based on composite price, based on USDA’s 2000-2009 average yield
NOTE: 2010 Walnut prices not published
34
What Can We
Expect This
Coming
C
i
Season?
S
?
35
ON-Year Pecan Production 1997-2009
1997
1999
2001
2003
2005
2007
2009
Avg
(Million Pounds)
AL
13.0
13.0
15.0
8.0
4.0
12.0
14.0
11.3
AR
3.5
3.8
2.6
3.8
2.3
2.3
2.5
3.0
AZ
18.5
22.8
21.0
22.5
22.0
23.0
20.0
21.4
CA
3.0
1.9
3.7
3.7
4.0
4.4
3.9
3.5
FL
1.8
3.7
3.3
2.1
1.0
1.9
3.1
2.4
GA
100.0
120.0
110.0
75.0
80.0
150.0
90.0
103.6
KS
42
4.2
50
5.0
22
2.2
20
2.0
32
3.2
05
0.5
10
1.0
26
2.6
LA
12.0
22.0
14.0
20.0
5.0
14.0
9.0
13.7
2.6
0.005
MO
1.8
1.5
MS
4.0
5.0
4.5
7.0
1.0
3.0
3.0
3.9
NC
1.5
1.2
3.2
2.5
2.0
0.2
0.0
1.5
NM
45.0
52.0
60.0
55.0
65.0
74.0
68.0
59.9
OK
35.0
63.0
20.0
6.0
21.0
30.0
13.5
26.9
SC
3.5
2.7
4.0
4.5
2.2
2.0
2.0
3.0
TX
90 0
90.0
90 0
90.0
75 0
75.0
70 0
70.0
65 0
65.0
70 0
70.0
60 0
60.0
74 3
74.3
335.0
406.1
338.5
282.1
280.3
387.3
302.0
333.0
U.S.
¹ Source: USDA-NASS, Noncitrus Fruits and Nuts 2010 Preliminary Summary, January 21, 2011
36
PECAN ON AND OFFOFF-YEAR PRODUCTION
(1996 2010)
(1996-2010)
Million Pounds
AVG.
’97-09,
333
On-Year
’96-10,
199
Off-Year
¹ Source: USDA-NASS, Noncitrus Fruits and Nuts 2010 Preliminary Summary, January 21, 2011
37
38
http://drought.unl.edu/dm/forecast.html
39
U.S. IMPROVED AND NATIVE PECANS, 20002000-2011
PRODUCTION AND AVERAGE PRICE RECEIVED (IN(IN-SHELL)
Million Pounds
Cents/Lb.
387
330
339
282
210
173
302
280
260
207
186
202
¹ Source: USDA-NASS, Noncitrus Fruits and Nuts 2010 Preliminary Summary, January 21, 2011
40
IN-SHELL PECANS
INCOLD STORAGE STOCKS
STOCKS, 20032003-2010
Source: USDA-NASS, Cold Storage Report, January 21, 2011
Stocks as of September 30
41
IN-SHELL PECANS
INCOLD STORAGE STOCKS, 2010 AND 2011 PROJECTED
Source: USDA-NASS, Cold Storage Report, February 22, 2011
NOTE: 2011 Projected through September based on the average monthly use January-September, 2009, 2007,
2005, 2003 after on-season years
42
U.S. PECAN PRODUCTION, STOCKS & PRICE, 20002000-2011
IN--SHELL BASIS
IN
¹ Source: USDA-NASS, Noncitrus Fruits and Nuts 2010 Preliminary Summary, January 21, 2011;
USDA-NASS, Cold Storage Report, February 22, 2011
43
U.S. GROSS DOMESTIC PRODUCT
2006--2010, BY QUARTERS
2006
Trillions of Current Dollars
+3.4%
+4.6%
+3.7%
+4.8%
+4.7%
-4.0%
-3.9%
+2.3%
% Change at annual rates
Q
Quarterly
y data at seasonally
y adjusted
j
annual rates
Source: Department of Commerce, Bureau of Economic Analysis
Updated from January 2011 Economic Indicators
U.S. IMPROVED AND NATIVE PECANS, 19801980-2010
PRODUCTION AND AVERAGE PRICE RECEIVED (IN
(IN--SHELL)
Cents/Lb.
C t /Lb
167
105
¹ Source: USDA-NASS, Noncitrus Fruits and Nuts 2010 Preliminary Summary, January 21, 2011
45
PECAN BREAK
BREAK--EVEN PRICES PER POUND, BASED ON
WHOLESALE PRICES AND PERCENT SHELLSHELL-OUT
Assumptions: Shelling Cost
$1.25 Per Shelled Pound
Pecan Wholesale Price Shelled
$
4.60
$
4.80 $
6.00 $
6.20 $
6.40 $
6.60
1.42 $
5.00 $ 5.20 $ 5.40 $ 5.60 $ 5.80 $
Break-even Price p
per Pound In-shell
1.50 $ 1.58 $ 1.66 $ 1.74 $ 1.82 $
40%
$
1.34
$
1.90 $
1.98 $
2.06 $
2.14
42%
$
1.41
$
1.49 $
1.58 $
1.66 $
1.74 $
1.83 $
1.91 $
2.00 $
2.08 $
2.16 $
2.25
44%
$
1.47
$
1.56 $
1.65 $
1.74 $
1.83 $
1.91 $
2.00 $
2.09 $
2.18 $
2.27 $
2.35
46%
$
1.54
$
1.63 $
1.73 $
1.82 $
1.91 $
2.00 $
2.09 $
2.19 $
2.28 $
2.37 $
2.46
48%
$
1.61
$
1.70 $
1.80 $
1.90 $
1.99 $
2.09 $
2.18 $
2.28 $
2.38 $
2.47 $
2.57
50%
$
1.68
$
1.78 $
1.88 $
1.98 $
2.08 $
2.18 $
2.28 $
2.38 $
2.48 $
2.58 $
2.68
52%
$
1.74
$
1.85 $
1.95 $
2.05 $
2.16 $
2.26 $
2.37 $
2.47 $
2.57 $
2.68 $
2.78
54%
$
1.81
$
1.92 $
2.03 $
2.13 $
2.24 $
2.35 $
2.46 $
2.57 $
2.67 $
2.78 $
2.89
56%
$
1
1.88
88
$
1
1.99
99 $
2
2.10
10 $
2
2.21
21 $
2
2.32
32 $
2
2.44
44 $
2
2.55
55 $
2
2.66
66 $
2
2.77
77 $
2
2.88
88 $
3
3.00
00
58%
$
1.94
$
2.06 $
2.18 $
2.29 $
2.41 $
2.52 $
2.64 $
2.76 $
2.87 $
2.99 $
3.10
60%
$
2.01
$
2.13 $
2.25 $
2.37 $
2.49 $
2.61 $
2.73 $
2.85 $
2.97 $
3.09 $
3.21
62%
$
2
2.08
08
$
2
2.20
20 $
2
2.33
33 $
2
2.45
45 $
2
2.57
57 $
2
2.70
70 $
2
2.82
82 $
2
2.95
95 $
3
3.07
07 $
3
3.19
19 $
3
3.32
32
64%
$
2.14
$
2.27 $
2.40 $
2.53 $
2.66 $
2.78 $
2.91 $
3.04 $
3.17 $
3.30 $
3.42
46
SUMMARY
Industry at critical crossroads: Domestic vs. Exports
Production
- Avg. 283 million, 2007-2010
- Avg.
A g 255 million,
illi
2000
2000-2010
2010
Prices Up Past 8 Seasons
2010 Record High Prices
Exports
p
to China Influenced Market Prices
2010/11 Season = High off-year
-
Low carry-in
y stocks
Low forecast crop from Mexico
Supplies about 540 million (production, stocks and imports)
Below 2009
47
SUMMARY (CONT
(CONT.))
2011/2012
/
Season - On-year
y
-
Production about 330-340 million pounds
Carry-in stocks about 50-70 million pounds
380-400 million pounds (not including imports)
Just slightly higher 2010/11
Imports from Mexico: Mexico (Large On
On-year
year Crop Expected)
U.S. Economic Situation
Export
E
t Dependence
D
d
Market Outlook Promising
48