Pecan Market Update
January 2008

Now that we are firmly into 2008, let’s take a look back at the 2007 crop.  Estimates look as if 2007 was one of the largest crops on record.  If not for some poor quality in some of the major pecan producing areas, it probably would have been. 
California had one of its biggest years.  Despite the large crop, demand has been strong, which has helped keep pecan prices from dipping into all time lows.   However, we are not seeing the high prices like the last few years. 
Everyone is curious about shipments into China; it seems to be the buzz throughout the pecan community.  USDA shows 16-18 million pounds were shipped to Asia of the 2007 crop up until December 31^st.  This is about the same amount that was shipped for the entire 2006 crop.  Shipments continue to China but not as fast as they were before January 1^st.  No doubt China has proven to be a major player in Pecan consumption. 

Brody Blain
Blain Farms

Pecan Market Update
August 2007

We are expected to have that limb buster year that everyone has been looking for. Here in Tulare County I have seen the trees starting to weep with a full crop of pecans. Trees are soaking up water with the heavy crop. Next year will more than likely be a short year that compares to 2006. California is expected to have a three and a half million pound year. With the heavy crop we are expected to have lower meat yields this season. We are looking to have a small drop in the price per point. The market has been steady with China being online with the U.S. and Old Mexico. National numbers are looking to be three hundred and fifty million pounds this season with Old Mexico looking at an eighty million pound year or higher. The inshell market is still HOT overseas. Texas has been experiencing wet weather, and with the wet weather brings Scab. Overall, California is looking very well right now. Hamilton Ranches is looking forward to a heavy up and coming season.

Chris Hamilton
Hamilton Ranches

Pecan Market Update
May 19, 2004

The price of pecans has remained strong during the last 4 months.
The post-holiday period is a time of slow sales since most pecan users have some inventory left over from the holidays, and consumption is much less than during that season. It is not uncommon to see prices drop after the holidays, but other than a brief drop in prices during the holidays, we have not seen that occur this year.

A number of factors have caused the current high prices. The amount of inventory from the 2002 crop was very low as we began harvesting the 2003 crop. Many buyers had delayed purchasing supplies for the holidays expecting to see lower prices as the large 2003 crop became available. Prices did drop a little in and December, but quickly recovered and climbed to even higher levels. We have seen Fancy Pecan Halves selling wholesale at $4.00 per pound, a price we haven’t seen in years.

Most of the industry expects a smaller crop in 2004. The stress from the large 2003 crop and poor growing conditions across much of the pecan belt would indicate that the trees will take a year off rather than set a large crop. A number of pecan users have been buying extra supplies from the 2003 crop in anticipation that there will inadequate supplies from the 2004 harvest. It is possible that we will see prices increase even further as the size of the 2004 is confirmed to be smaller as expected.

Brian Blain
Blain Farms

Selling Options for Pecan Growers
May 2003

Pecan Market and Grower Prices

The pecan market is probably the most unpredictable of all nut crops. It is unique compared to walnuts, almonds, and pistachios, in that very little of the crop is exported, and as much as 25% of the consumption in the U.S. comes from pecans imported from Mexico. It is the only nut industry with no generic promotion program and limited state-by-state efforts. It has no large co-op or processor (referred to as “shellers”) controlling more than 15% of the crop, such as Diamond Walnut or Blue Diamond Almond.

Due to a number of factors, the price of shelled pecans to end-users has been wildly fluctuating over the last few years. On several occasions, shellers have been forced to sell their inventory at huge losses. This has resulted in several shellers leaving the industry or going out of business. Today, most of the remaining shellers are very conservative in the price they pay growers, and they factor a substantial margin of safety into the price they pay growers.

Alternate purchase agreements are becoming more common in the
pecan industry.

These speculative prices have resulted in co-operative selling arrangements that minimize the risk to shellers, and maximize the return to growers. One of the most common is called a “pool”, where the grower delivers the crop to a sheller, who pools the nuts with those of other growers. The sheller doesn’t pay for the pecans until after he has shelled and sold the pecans and received payment. The grower receives whatever price the sheller receives, less any shelling cost and profit agreed to when the crop was delivered. It is similar to a co-op, but the grower has no ownership or control of the shelling company.

Another method is called “custom shelling” or “contract shelling”. It is similar to a pool, with the exception that the grower is more involved in the sale and marketing of the shelled nuts by participating in the pricing, time of sale and the like. This type of arrangement is usually limited to growers with large quantities.

A third option, and one that has become more popular the last few years, is for growers to put their crop in cold storage for several months prior to offering them for sale to shellers. This usually increases the price paid to growers for several reasons; shellers are able to pre-sell the nuts before paying for them, have a more stable market, and benefit from improved cash flow later in the marketing year.

The increased use of these alternative purchasing methods has had a positive effect on grower prices. Their continued popularity will continue to improve returns for both growers and shellers.