The American Pecan industry has been in a growth pattern over the past decade as growers from all across the southern United States have banded together, dusted off their passports, packed their suitcases full of pecans and traveled the globe telling the “pecan gospel” to anyone who will listen, and business has been good.
By studying metrics like, median household income and nut consumption habits, the American pecan growers have been able to find suitable markets to enter, and broaden the scope of pecan buyers, and ultimately end users. By doing this pecan growers have found that having multiple buyers has raised the price on the farm while keeping the price of pecans to the consumer relatively steady.
Another important step growers have taken, is creating access to somewhat more accurate data collection, which has allowed pecan growers to assess their efforts and gauge success in multiple different aspects. Now that growers have officially been collecting and releasing industry data for more than a year, officials are able to compare and gauge the market pulse more accurately. As this season begins to shape up, the data holds both good news and bad news for American pecan growers.
The positive news revealed by the data, is that growers have had several successes over the last couple of years. One of those being the increase in domestic consumption. Turns out as growers have been seeking out new customers all around the globe, the largest customer is still right here at home. While the export markets have been increasingly profitable for pecans, the latest growth in pecan shipments has been to the domestic market here in the US. This comes as no surprise to growers who recently embarked on a multimillion dollar marketing campaign to boost domestic consumption. However the increase in domestic consumption came not a moment too soon as the recent trade war between China and the US sent pecan exports plummeting from record highs.
The not so positive news revealed by the data, is that the growth in pecan shipments is being supplied by foreign pecans, while American pecans are being purchased less and less. Even with the onset of the trade war and the plummeting export shipments in pecans, the overall shipments of pecans is still up 6% y-t-d. But the purchases of American pecans is actually down 3% Y-T-D. That’s right, shipments of pecans are up, but purchase of American pecans are down. Foreign pecan purchases continue to hit all time highs as more and more pecan shellers purchase pecans from other countries as opposed to purchasing pecans from American growers.
The more significant point in the data is that last year, American pecan producers lost over 50 million pounds of crop when hurricane Micheal ripped through the southeast in early October 2018. Last year American producers lost around 17% of the total US pecan crop to the hurricane and this year American purchases are down another 3% from last year, all while American pecan shipments continue to rise.
American pecan growers have made significant headway in improving their industry, but their biggest challenge may be figuring out how to get their own pecans into the supply chain of this booming market.
