Texas pecan producers will increase production almost 50 percent over last year and should get a decent price for their efforts.
Average industry estimates forecast the 2007 Texas pecan crop at 70 million pounds; the National Pecan Shellers Association (NPSA) bumps that estimate up to 73 million. USDA estimates 70 million. That puts Texas behind Georgia (and possibly New Mexico) in total production. New Mexico could produce 69 to 80 million pounds of pecans, based on average industry estimates and NPS, respectively. USDA puts the New Mexico crop at 71 million pounds, 54.3 percent higher than last year.
Georgia may produce 93 million pounds, based on average industry estimates, or 125 million pounds according to NPSA. USDA's figure is 100 million. Georgia's production estimate (USDA) is 138 percent over last year's 42 million pound crop. Texas produced 47 million pounds in 2006. New Mexico produced 46 million pounds last year.
National production estimates call for a 319 million-pound crop, says Texas A&M Extension economist-management, Jose Pena, in Uvalde.
That's up 55 percent from the 206.3 million pound 2006 crop.
“The market opened to good price bids for good quality pecans for the gift market,” Pena says.
“Carry-in stocks of about 74 million pounds as of the end of September, 2007, are down 64 million pounds or 46 percent from the 138 million-pound carry-in a year ago.”
He says the production estimate plus the carry-in stocks put domestic supplies at 394 million pounds, up about 49 million or 14.3 percent from the 345 million pounds at the same time last year. That's up 12.9 percent from domestic supplies of 349 million pounds in 2005.
He says high prices in 2004 came about from a low off-year crop of 186 million pounds. Prices strengthened this past year after some 2005 weakness, he says. “The estimate of 394 million pounds does not appear significantly out of line in terms of current demand. Domestic supplies averaged 336 million pounds during the past five seasons when prices showed significant strength.”
He says U.S. exports also have increased recently and should go up again with this crop.
“A relatively weak dollar in terms of exchange rates with pecan importing countries, such as Canada, will make pecans less expensive and more attractive,” he says. “Exports to China increased significantly this past season and early interest indicates exports could increase further.”
Pena says the market might falter slightly but should remain relatively strong, “especially since the U.S. economy is prospering.”
He says the last pecan market collapse occurred in 2001, following the 9-11 catastrophe, “a large crop (339 million pounds), a weakening economy, reduced confidence in corporate America and collapse of the stock market.” Other segments of the economy also fell.
“The national economic situation has changed completely since 2001,” Pena says.
Mexico, the primary pecan exporter to the United States will make a slightly bigger crop, up 12.1 percent at 166.8 million pounds compared to 149.4 million last year. And Mexico has increased pecan exports into the United States to about 100 million pounds a year the past three seasons, up from an average of 60 to 72 million pounds previously. Mexico's expected 166.8 million pound crop could affect U.S. imports in the commercial market, but Pena says the market decides on import activity. “In addition, Mexico has limited storage capacity.”
Mexico also claims top spot as principal importer of U.S. pecans and likely will buy about 27.1 million pounds this season, according to the USDA-FAS Mexico Tree Nuts Annual Report for 2007.
It will be a record year for U.S. tree nut production, according to USDA estimates. A 2.7 billion pound crop estimate is a 13 percent increase from the 2.343 billion pounds produced in 2006. Almond production is forecast at a record 1.33 billion pounds, a 16.2 percent increase from the 1.115 billion pound 2006 crop. “(Almonds) account for the largest portion of the increased forecast,” Pena says. Walnut production also rises, 692 million pounds estimated, a 7.5 percent increase from the 640 million pound 2006 crop.
“Almonds will account for close to 50 percent of the total U.S. tree nut production and with walnuts will make up 74 percent of production,” Pena says. Pecans account for only 12 percent of the total tree nut crop.
Pena says even with bigger crops each year, prices for most U.S. tree nuts “have been climbing throughout the 2000s due to strong world demand.”