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

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

The Pecan MarketHow long will prices stay this high??

Brody BlainVice – President

Page 2: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

Pecan – Supply and Demand

• Supply• Production• Imports• Carry-in

• Demand• Domestic Consumption• Exports (Foreign Consumption)

Page 3: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

Supply

Page 4: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

U.S. Pecan Production

2001 02 03 04 05 06 07 08 09 20100

50

100

150

200

250

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350

400

450

ProductionTrendAverage (262)

Page 5: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

Imported Pecans

2001 02 03 04 05 06 07 08 09 20100

20

40

60

80

100

120

140

160

180

200

ImportsTrendAverage (138)

Page 6: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

Total Pecan Supply

2001 02 03 04 05 06 07 08 09 10 *20110

50

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450

ProductionTrendImportsTrend

Page 7: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

Carry-in

2001 02 03 04 05 06 07 08 09 10 20110

20

40

60

80

100

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Carry-InLinear (Carry-In)Average (111)

Page 8: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

Demand

Page 9: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

U.S. Consumption

2001 02 03 04 05 06 07 08 09 2010270

280

290

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310

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340

ConsumptionLinear (Consumption)Average (309)

Page 10: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

Exports

2001

02 03 04 05 06 07 08 09 10 110

20

40

60

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160

ExportsTrend01-06 (67)07-10 (134)Average

Page 11: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

2001 – 2004 Exports by Region

Mexico27%

Canada29%

Others21%

EU24%

Page 12: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

2009 Exports by Country

Asia; 40.7

Mexico; 22.3

E.U.; 17.1

Canada; 13.2Israel; 3.5

Others; 3.2

ASIA: China, Hong Kong, and Vietnam

Page 13: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.
Page 14: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

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.

Page 15: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

Production vs. Price

2001 02 03 04 05 06 07 08 09 20100

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0

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ProductionLinear (Production)PriceLinear (Price)

Page 16: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

ForecastJune-11 July-11 July-11 August-11Tri State TPGA TPGA CPGA

State Littlepage Pape Brookshire BlainAL 7.0 8.0 7.0 7.0AR 3.0 4.0 2.0 3.0AZ 19.0 19.0 20.0 18.0CA 3.5 4.0 4.0 3.5FL 0.5 1.5 2.2 2.0GA 80.0 90.0 84.0 90.0KS 2.0 5.0 2.0 2.0LA 8.5 9.0 7.5 8.0MS 2.0 2.5 1.5 2.0MO 1.5 w/ks 1.2 0.5NM 57.0 55.0 63.0 60.0NC 0.5 1.0 0.0OK 15.0 19.0 16.0 25.0SC 2.0 3.0 2.1 2.0TX 45.0 40.0 40.0 35.0

U.S. 246.5 261.0 252.5 258.0 Mexico 135.0 142.0 Carryin 80.0 70.0

Page 17: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.
Page 18: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

Average “ON” & “OFF”

2001 02 03 04 05 06 07 08 09 20100

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450

ONOFFAverage "ON" (314)Average "OFF" (211)

Page 19: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

Predictions

2001 02 03 04 05 06 07 08 09 10 11 12 20130

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600

Supply & Demand

SupplyDemand

Page 20: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

What could affect Supply

Increase in SupplyGeorgiaTexasNew Plantings

Decrease in SupplyDroughtWeather

Page 21: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

What could affect Demand

Increase in DemandHealth BenefitsChina

Decrease in DemandPriceFood SafetySubstitution

Page 22: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

Pecan Competition

2002 2003 2004 2005 2006 2007 2008 2009 20100

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AlmondLinear (Almond)PistachioLinear (Pistachio)WalnutLinear (Walnut)

Page 23: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

Pecan Price Competition

2002 2003 2004 2005 2006 2007 2008 2009 20100

50

100

150

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250

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Almond $Linear (Almond $)Pistachio $Linear (Pistachio $)Walnut $Linear (Walnut $)

Page 24: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

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

Page 25: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

Shelled to In-shell ConversionWholesale Shelled Pecan Price

$ 4.60 $ 4.80 $ 5.00 $ 5.20 $ 5.40 $ 5.60 $ 5.80 $ 6.00 $ 6.20 $ 6.40 $ 6.60

In-shell Conversion

40% $ 1.34 $ 1.42 $ 1.50 $ 1.58 $ 1.66 $ 1.74 $ 1.82 $ 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% $ 1.88 $ 1.99 $ 2.10 $ 2.21 $ 2.32 $ 2.44 $ 2.55 $ 2.66 $ 2.77 $ 2.88 $ 3.00

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% $ 2.08 $ 2.20 $ 2.33 $ 2.45 $ 2.57 $ 2.70 $ 2.82 $ 2.95 $ 3.07 $ 3.19 $ 3.32

Assumption – Sheller spread $1.25

Page 26: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

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

Page 27: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

Summary

Low SupplyShort “ON” crop 2011 crop yearProbably Average “OFF” crop 2012 crop yearShould take two “ON” crops to replenish supplies to 2009 levels

2013 & 2015

DemandHealth Benefits, China & Sheller Relationship

Page 28: The Pecan Market How long will prices stay this high?? Brody Blain Vice – President.

Any Questions?

Brody Blain Vice-President 800-680-1788


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