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)

Supply

U.S. Pecan Production

Imported Pecans

Total Pecan Supply

Carry-in

Demand

U.S. Consumption

Exports

2001 – 2004 Exports by Region

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

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.

Production vs. Price

Forecast June-11July-11 August-11 Tri StateTPGA CPGA StateLittlepagePapeBrookshireBlain AL AR AZ CA FL GA KS LA MS MO 1.5w/ks NM NC OK SC TX U.S Mexico Carryin

Average ON & OFF

Predictions

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

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

Pecan Competition

Pecan Price Competition

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

Shelled to In-shell Conversion Wholesale 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 $ % $ 1.41 $ 1.49 $ 1.58 $ 1.66 $ 1.74 $ 1.83 $ 1.91 $ 2.00 $ 2.08 $ 2.16 $ % $ 1.47 $ 1.56 $ 1.65 $ 1.74 $ 1.83 $ 1.91 $ 2.00 $ 2.09 $ 2.18 $ 2.27 $ % $ 1.54 $ 1.63 $ 1.73 $ 1.82 $ 1.91 $ 2.00 $ 2.09 $ 2.19 $ 2.28 $ 2.37 $ % $ 1.61 $ 1.70 $ 1.80 $ 1.90 $ 1.99 $ 2.09 $ 2.18 $ 2.28 $ 2.38 $ 2.47 $ % $ 1.68 $ 1.78 $ 1.88 $ 1.98 $ 2.08 $ 2.18 $ 2.28 $ 2.38 $ 2.48 $ 2.58 $ % $ 1.74 $ 1.85 $ 1.95 $ 2.05 $ 2.16 $ 2.26 $ 2.37 $ 2.47 $ 2.57 $ 2.68 $ % $ 1.81 $ 1.92 $ 2.03 $ 2.13 $ 2.24 $ 2.35 $ 2.46 $ 2.57 $ 2.67 $ 2.78 $ % $ 1.88 $ 1.99 $ 2.10 $ 2.21 $ 2.32 $ 2.44 $ 2.55 $ 2.66 $ 2.77 $ 2.88 $ % $ 1.94 $ 2.06 $ 2.18 $ 2.29 $ 2.41 $ 2.52 $ 2.64 $ 2.76 $ 2.87 $ 2.99 $ % $ 2.01 $ 2.13 $ 2.25 $ 2.37 $ 2.49 $ 2.61 $ 2.73 $ 2.85 $ 2.97 $ 3.09 $ % $ 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

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

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

Any Questions? Brody Blain Vice-President