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 Carry-In (MT) US Crop (MT) Mexican Imports (MT) 350,000.00 Metric Tons (Inshell Basis) 300,000.00 250,000.00 200,000.00 150,000.00 100,000.00 50,000.00 0.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (est) Crop Year Source: USDA NASS. Foreign Ag Statistics Service & Nature’s Finest Foods

MEXICAN EXPORTS TO US 120,000.00 Metric Tons (Inshell Basis) 100,000.00 80,000.00 60,000.00 40,000.00 20,000.00 0.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (est) Crop Year Source: Foreign Ag Statistics Service & Nature’s Finest Foods

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

US SUPPLY VS CONSUMPTION & PRICE Total Supply (MT) Consumption (MT) Price of Jr Mam Hvs/KG 350,000.00 $18.00 $16.00 300,000.00 Inshell Equivalent (Metric Tons) $14.00 250,000.00 $12.00 200,000.00 $10.00 Price/KG $8.00 150,000.00 $6.00 100,000.00 $4.00 50,000.00 $2.00 0.00 $0.00 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

JR MAMMOTH PECAN HALVES PRICE PER KG Price/KG $16.50 $16.00 $15.50 $15.00 $14.50 $14.00 $13.50 $13.00 $12.50 $12.00 Source: Mintec and Nature’s Finest Foods

US PECAN EXPORTS Total Exports (MT) 120,000.00 100,000.00 Metric Tons (Inshell Basis) 80,000.00 60,000.00 40,000.00 20,000.00 0.00 Crop Year Source: Foreign Ag Statistics Service & Nature’s Finest Foods

BREAKDOWN OF US EXPORTS 120,000.00 Metric Tons (Inshell Basis) Exports - Other Countries (MT) 100,000.00 Exports to Holland (MT) 80,000.00 Exports to UK (MT) 60,000.00 Exports to Mexico (MT) 40,000.00 Exports to Canada (MT) Total Exports to China (incl: 20,000.00 China/HK/VN) 0.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Crop Year Source: Foreign Ag Statistics Service & Nature’s Finest Foods

US EXPORTS TO CHINA (CHINA/HONG KONG/VIETNAM) 50,000.00 45,000.00 Metric tons (Inshell Basis) 40,000.00 35,000.00 30,000.00 25,000.00 20,000.00 15,000.00 10,000.00 5,000.00 0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (est) Crop Year Source: Foreign Ag Statistics Service/Nature’s Finest Foods

US CONSUMPTION VS. TOTAL EXPORTS US Consumption (MT) Total Exports (MT) 160,000.00 140,000.00 Metric Tons (Inshell Basis) 120,000.00 100,000.00 80,000.00 60,000.00 40,000.00 20,000.00 0.00 Crop Year Source: Foreign Ag Statistics Service & Nature’s Finest Foods

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 Carry-In (MT) US Crop (MT) Australia (MT) Mexico (MT) South Africa (MT) 400,000.00 Metric Tons (Inshell Basis) 350,000.00 300,000.00 250,000.00 200,000.00 150,000.00 100,000.00 50,000.00 0.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (est) Crop Year Source: USDA NASS, Stahman Farms -Australia, Golden Peanut & Tree Nut – SA, Bester, SA, Mtebeni Valley Farms, SA, Agricultural Information Service - Mexico

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 World Supply (MT) World Consumption (MT) 400,000.00 Metric Tons (Inshell Basis) 350,000.00 300,000.00 250,000.00 200,000.00 150,000.00 100,000.00 50,000.00 0.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (est) Crop Year 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 180,000.00 Metric Tons (Inshell Basis) 160,000.00 140,000.00 120,000.00 100,000.00 80,000.00 60,000.00 40,000.00 20,000.00 0.00 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (est) US Crop (MT) Mexico (MT) Crop Year Source: USDA NASS. Foreign Ag Statistics Service & Nature’s Finest Foods

PROJECTED WORLD PECAN PRODUCTION Carry-In (MT) US Crop (MT) Australia (MT) Mexico (MT) South Africa (MT) 500,000.00 Metric Tons (Inshell Basis) 450,000.00 400,000.00 350,000.00 300,000.00 250,000.00 200,000.00 150,000.00 100,000.00 50,000.00 0.00 2016 2017 (est) 2018 (est) 2019 (est) 2020 (est) 2021 (est) Crop Year Source: Stahman Farms -Australia, Golden Peanut & Tree Nut – SA, Agricultural Information Service – Mexico, Nature’s Finest Foods

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 Average Insehll Price per KG - Improved $6.40 $6.20 $6.00 $5.80 $5.60 $5.40 $5.20 $5.00 $4.80 2016 2017 (est) 2018 (est) 2019 (est) 2020 (est) 2021 (est) Crop Year Source: Nature’s Finest Foods

US EXPORTS TO CHINA VS. S. AFRICAN PRODUCTION Total Inshell Exports to China (incl: China/HK/VN) South Africa (MT) 50,000.00 Metric Tons (Inshell Basis) 45,000.00 40,000.00 35,000.00 30,000.00 25,000.00 20,000.00 15,000.00 10,000.00 5,000.00 0.00 2012 2013 2014 2015 2016 2017 (est) Crop Year Source: USDA FAS, Golden Peanut & Tree Nut – SA, Nature’s Finest Foods, Ltd.

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

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