Supply and Demand Dynamics in the US Pecan Market

Pecan Nut

United States

Market & Price Trends

Published Jul 25, 2023

The 2022/23 pecan marketing year (MY) in the United States (US) is expected to conclude with tight inventories, potentially reaching a low of 107 million lbs. Despite an overall decline in nut consumption, pecan demand has stayed strong, thanks to their continued popularity as a key ingredient in various dishes. The US hasn't imported pecans in the usual quantities, contributing to the projected tight-ending stock situation. As a result, the import volume for pecans is likely to increase significantly in the 2023/24 MY, returning to the levels seen before the 2021/22 period.

Supply in 2022/23

The official United States Department of Agriculture (USDA) crop estimate for pecans harvested in 2022 is 274.5 million lbs. However, receipts reported by the American Pecan Council for the 2022/23 season stood at only 234.0 million lbs or 85% of the crop estimate. There are two reasons for receipts falling short of the crop estimate. The first is that the harvest started earlier than usual in 2022, with some of the crops delivered in August and already reported in the 2021/22 MY. The second is that farmers have held on to their stocks in the hope of higher prices and have reverted to selling directly from their farms to consumers to get a higher price.

Strong Domestic Consumption but Weak Exports

In the 2022/23 MY, domestic consumption has remained robust, hitting 254 million lbs at the end of May (on an in-shell basis), a 3% rise year-over-year (YoY), and surpassing the five-year average by the same percentage. Total domestic consumption for the 2022/23 season is estimated at 296 million lbs.

In general, nut consumption as a stand-alone snack has decreased in the US over the past two years, mainly due to customers seeking more affordable alternatives and the reduced emphasis on healthy snacking post-pandemic. However, pecans remain a favored ingredient in numerous American dishes, including pecan pies and pralines, which has helped maintain steady consumption levels. The same trend was observed when walnut consumption increased in 2022/23, as it is also mostly used as an ingredient in pastries and confectioneries.

On the other hand, exports have been weak at 68 million lbs (in-shell), a 7% YoY increase, but 17% below the five-year average. Exports are projected to reach 82 million lbs (in-shell) when the marketing year wraps up. Weak Chinese demand continues, with US exports to China and Hong Kong reaching only 14.8 million lbs (on an in-shell basis) in 2022/23 MY. This is 26% higher YoY but 24% below the four-year average. China has opted for Mexican and South African pecans instead, and China’s own production also continues to grow.

Source: American Pecan Council (APC)

Ending Stocks

At the end of May, with three months left in the marketing year, the American Pecan Council reported an inventory of 217 million lbs, significantly lower than the 297 million lbs at the end of May-22. When the 2022/23 marketing year ends, inventories could be as low as 107 million lbs, the lowest since at least 2016.

Source: Tridge, USDA, APC

Outlook for 2023/24

It is still too early for any accurate crop estimates for the 2023 crop. Georgia, which had a bumper harvest of 125 million lbs in 2022 (46% of US production), could see a decline being closer to 95 to 100 million lbs in 2022. New Mexico, where about 27 to 30% of the crop is grown, has recovered from the extreme drought in the last couple of years. Pecan orchards are mostly irrigated, but improved groundwater availability could boost production. New Mexico produced 79 million lbs in 2022, and similar or slightly higher production is expected in 2023. All-in-all, the five-year average production of 266 million lbs would prove a realistic benchmark.

Imports to Supplement Supply

Before 2021/22, the US imported an average of 95 million lbs annually. This decreased significantly in 2021/22, at only 33 million lbs. So far in 2022/23, as of the end of May, imports reached only 26 million lbs and are estimated to reach only 30 million lbs at the end of the 2022/23 MY. Imports will most likely revert to pre-2021/22 numbers in the coming marketing year. Mexico could be the primary beneficiary if these imports return to previous levels, but South Africa, Australia, Argentina, and even the rising producer, Brazil, could look for opportunities to export to the US.