DANIEL J. ZEDAN NATURES FINEST FOODS 1505 PARAMOUNT PARKWAY - - PowerPoint PPT Presentation

DANIEL J. ZEDAN

NATURE’S FINEST FOODS

1505 PARAMOUNT PARKWAY BATAVIA, IL 60510

Ph: 630-879-5200 Fax: 630-879-5204 Email: dzedan@nffonline.com website: www.nffonline.com

A LOOK AT CURRENT MARKET CONDITIONS

US SUPPLY COMPONENTS

Source: USDA NASS. Foreign Ag Statistics Service & Nature’s Finest Foods

Metric Tons (Inshell Basis) Crop Year

0.00 50,000.00 100,000.00 150,000.00 200,000.00 250,000.00 300,000.00 350,000.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (est)

Carry-In (MT) US Crop (MT) Mexican Imports (MT)

MEXICAN EXPORTS TO US

Source: Foreign Ag Statistics Service & Nature’s Finest Foods

Crop Year Metric Tons (Inshell Basis)

0.00 20,000.00 40,000.00 60,000.00 80,000.00 100,000.00 120,000.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (est)

PRODUC RODUCT AVAIL ILABLE BLE FOR R SA SALE LE BY US

Note: Figures are expressed in metric tons, inshell basis, and do not take into account US Inshell sent to Mexico for shelling. Meats are converted assuming a 44% yield. Data Sources: USDA NASS & FAS, USDA Market News & Nature’s Finest Foods

2017 (est.) Carry-In 70,365.86 US Crop 144,788.17 Mexican Imports 86,183.43* Total Supply 301,337.47 Consumption 226,798.51*

*NOTE: NFF Estimate

US SUPPLY VS CONSUMPTION & PRICE

Crop Year

Source: USDA National Ag Statistics Service, Foreign Ag Statistics and Nature’s Finest Foods. **Note: 2012 US Supply & Consumption Figures are estimates as the USDA did not publish final crop figures

$0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 $18.00

0.00 50,000.00 100,000.00 150,000.00 200,000.00 250,000.00 300,000.00 350,000.00

Price/KG Inshell Equivalent (Metric Tons)

Total Supply (MT) Consumption (MT) Price of Jr Mam Hvs/KG

JR MAMMOTH PECAN HALVES PRICE PER KG

Source: Mintec and Nature’s Finest Foods $12.00 $12.50 $13.00 $13.50 $14.00 $14.50 $15.00 $15.50 $16.00 $16.50

Price/KG

US PECAN EXPORTS

Source: Foreign Ag Statistics Service & Nature’s Finest Foods 0.00 20,000.00 40,000.00 60,000.00 80,000.00 100,000.00 120,000.00 Total Exports (MT)

Metric Tons (Inshell Basis) Crop Year

BREAKDOWN OF US EXPORTS

Metric Tons (Inshell Basis) Crop Year

Source: Foreign Ag Statistics Service & Nature’s Finest Foods 0.00 20,000.00 40,000.00 60,000.00 80,000.00 100,000.00 120,000.00

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Exports - Other Countries (MT) Exports to Holland (MT) Exports to UK (MT) Exports to Mexico (MT) Exports to Canada (MT) Total Exports to China (incl: China/HK/VN)

US EXPORTS TO CHINA

(CHINA/HONG KONG/VIETNAM)

Source: Foreign Ag Statistics Service/Nature’s Finest Foods

Crop Year Metric tons (Inshell Basis)

0.00 5,000.00 10,000.00 15,000.00 20,000.00 25,000.00 30,000.00 35,000.00 40,000.00 45,000.00 50,000.00

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (est)

US CONSUMPTION VS. TOTAL EXPORTS

Source: Foreign Ag Statistics Service & Nature’s Finest Foods

Crop Year Metric Tons (Inshell Basis)

0.00 20,000.00 40,000.00 60,000.00 80,000.00 100,000.00 120,000.00 140,000.00 160,000.00

US Consumption (MT) Total Exports (MT)

WHY ARE EXPORTS EXPECTED TO INCREASE?

❖ Since January 2017, prices for shelled meats

have declined approximately 13%

❖ In addition to the decline in prices, the

continued weakening of the dollar against the Euro has given EU countries an additional discount of approximately 15%

WORLD PECAN SUPPLY

Metric Tons (Inshell Basis) Crop Year

Source: USDA NASS, Stahman Farms -Australia, Golden Peanut & Tree Nut – SA, Bester, SA, Mtebeni Valley Farms, SA, Agricultural Information Service - Mexico 0.00 50,000.00 100,000.00 150,000.00 200,000.00 250,000.00 300,000.00 350,000.00 400,000.00

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (est)

Carry-In (MT) US Crop (MT) Australia (MT) Mexico (MT) South Africa (MT)

WORLD SUPPLY-INSHELL BASIS METRIC TONS

Country 2016 2017 (est.) United States 121,913.37 144,788.17 Mexico 140,711.99 112,569.59 South Africa 9,750.00 16,500.00 Australia 2,600.00 3,500.00 US Carry-In 58,558.20 70,365.86 WORLD TOTAL 333,533.56 347,723.62

Source: USDA NASS, Stahman Farms- Australia, Golden Peanut & Tree Nut–SA, Bester-SA, Mtebeni Valley Farms, SA, Agricultural Information Service - Mexico, Nature’s Finest Foods, Ltd.

WORLD SUPPLY

• VS. CONSUMPTION

Crop Year Metric Tons (Inshell Basis)

0.00 50,000.00 100,000.00 150,000.00 200,000.00 250,000.00 300,000.00 350,000.00 400,000.00

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (est) World Supply (MT) World Consumption (MT)

Source: USDA NASS, Stahman Farms- Australia, Golden Peanut & Tree Nut–SA, Bester-SA, Mtebeni Valley Farms, SA, Agricultural Information Service - Mexico, Nature’s Finest Foods, Ltd.

PECAN PRODUCTION UNITED STATES VS. MEXICO

Source: USDA NASS. Foreign Ag Statistics Service & Nature’s Finest Foods

Metric Tons (Inshell Basis) Crop Year

0.00 20,000.00 40,000.00 60,000.00 80,000.00 100,000.00 120,000.00 140,000.00 160,000.00 180,000.00

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (est)

US Crop (MT) Mexico (MT)

PROJECTED WORLD PECAN PRODUCTION

Metric Tons (Inshell Basis) Crop Year

Source: Stahman Farms -Australia, Golden Peanut & Tree Nut – SA, Agricultural Information Service – Mexico, Nature’s Finest Foods 0.00 50,000.00 100,000.00 150,000.00 200,000.00 250,000.00 300,000.00 350,000.00 400,000.00 450,000.00 500,000.00

2016 2017 (est) 2018 (est) 2019 (est) 2020 (est) 2021 (est) Carry-In (MT) US Crop (MT) Australia (MT) Mexico (MT) South Africa (MT)

CHINESE PLANTINGS

❖ Approximately 33,000 hectares. * ❖ Very good research program ❖ 80% planted on hillsides in very small orchards. Figure

includes nurseries

❖ Poor varietal selection, grown in the wrong place. ❖ Poor orchard management ❖ 2016 Commercial Production – 5 Tons ❖ 2017 Commercial Production – 20 Tons ❖ Within the next five years, 10,000 hectares are projected

to come into commercial production

*Source: The Research Institute of Subtropical Forestry, Chinese Academy of Forestry

MARKET IMPACTORS

❖ Continued production increases in Mexico, China and

Australia.

❖ Future production in Argentina, Brazil and Peru ❖ Mexico’s ability to meet GFSI Food Safety Standards

and shift to selling directly to US Market

❖ Major US firms changing payment terms, conditions of

contracting, etc.

❖ China’s 15% increase of the tariff on US pecans ❖ China’s pecan consumption has remained relatively

unchanged since 2012

MARKET IMPACTORS

(CONTINUED)

❖ US Cold Storage holdings are approximately 129,275

metric tons. Based on current projections, the US could carry-out 70,308 metric tons

❖ It is estimated that US Growers are holding

approximately 13,696 metric tons of inshell for sale to China

❖ It is estimated that Mexico still has approximately

9,072 metric tons of uncommitted inshell

❖ While there were issues with overall quality of the 2017

US crop, the inshell currently being held for sale to China by US Growers is of good to excellent quality

PROJECTED AVERAGE PRICE IMPROVED INSHELL

Crop Year

Source: Nature’s Finest Foods $4.80 $5.00 $5.20 $5.40 $5.60 $5.80 $6.00 $6.20 $6.40

2016 2017 (est) 2018 (est) 2019 (est) 2020 (est) 2021 (est)

Average Insehll Price per KG - Improved

US EXPORTS TO CHINA VS.

• S. AFRICAN PRODUCTION

Crop Year Metric Tons (Inshell Basis)

Source: USDA FAS, Golden Peanut & Tree Nut – SA, Nature’s Finest Foods, Ltd. 0.00 5,000.00 10,000.00 15,000.00 20,000.00 25,000.00 30,000.00 35,000.00 40,000.00 45,000.00 50,000.00

2012 2013 2014 2015 2016 2017 (est)

Total Inshell Exports to China (incl: China/HK/VN) South Africa (MT)

AMERICAN PECAN COUNCIL (APC)

❖ First crop data has been collected. Based on

assessments collected, preliminary crop data indicates that the 2016 US Crop was 130,937.71 metric tons, 7% more than the official USDA estimate of 121,913.27 metric tons. Over $8.2 million has been collected relative to the 2016 crop

❖ 2017 Data is now being collected. The first reports

should go out sometime in May or June.

❖ A new ‘Brand Launch’ will occur this week ❖ Funding has been approved for marketing projects in

four countries as well as for two research/marketing projects.

NATIONAL PECAN SHELLER’S ASSOCIATION (NPSA)

❖ Has let contract to perform a shelf-life study on

shelled pecan meats

❖ Will conduct two ‘Chef Summit’s’ this year ❖ A committee has been established to develop a new

standard for shelled pecan meats. This will probably start as a rewrite of the 1969 USDA Standards for Shelled Pecan Meats. However, the committee will also invite participation in the process by key stakeholders in Mexico, S. Africa and Australia with the hope of getting international adaptation of the standard

QUESTIONS?