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The Pecan Market

The Pecan Market. Brody Blain Vice – President. How long will prices stay this high??. Pecan – Supply and Demand . Supply Production Imports Carry-in Demand Domestic Consumption Exports (Foreign Consumption). Supply. U.S. Pecan Production. Imported Pecans. Total Pecan Supply.

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The Pecan Market

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  1. The Pecan Market Brody Blain Vice – President How long will prices stay this high??

  2. Pecan – Supply and Demand • Supply • Production • Imports • Carry-in • Demand • Domestic Consumption • Exports (Foreign Consumption)

  3. Supply

  4. U.S. Pecan Production

  5. Imported Pecans

  6. Total Pecan Supply

  7. Carry-in

  8. Demand

  9. U.S. Consumption

  10. Exports

  11. 2001 – 2004 Exports by Region

  12. 2009 Exports by Country ASIA: China, Hong Kong, and Vietnam

  13. Supply and Demand • Four basic laws of supply and demand: If demand increases and supply remains unchanged, then it leads to higher equilibrium price and quantity. • If demand decreases and supply remains unchanged, then it leads to lower equilibrium price and quantity. • If supply increases and demand remains unchanged, then it leads to lower equilibrium price and higher quantity. • If supply decreases and demand remains unchanged, then it leads to higher price and lower quantity.

  14. Production vs. Price

  15. Forecast

  16. Average “ON” & “OFF”

  17. Predictions

  18. What could affect Supply Increase in Supply Georgia Texas New Plantings Decrease in Supply Drought Weather

  19. What could affect Demand Increase in Demand Health Benefits China Decrease in Demand Price Food Safety Substitution

  20. Pecan Competition

  21. Pecan Price Competition

  22. Trends • China wants to buy inexpensive In-shell pecans • Tend to buy varieties typically found in the east • Stuart • Desirable • Moneymaker • Tend to buy from the east where yields are lower

  23. Shelled to In-shell Conversion Assumption – Sheller spread $1.25

  24. Trends • China wants to buy inexpensive inshell pecans • Tend to buy varieties typically found in the east • Stuart • Desirable • Moneymaker • Tend to buy from the east where yields are lower • U.S. Shellers left with high yielding western varieties • Higher price to growers in the West (In-shell Basis) • Better color and shelling yields

  25. Summary Low Supply Short “ON” crop 2011 crop year Probably Average “OFF” crop 2012 crop year Should take two “ON” crops to replenish supplies to 2009 levels 2013 & 2015 Demand Health Benefits, China & Sheller Relationship

  26. Any Questions? Brody Blain Vice-President 800-680-1788

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