The National Pecan Federation recently submitted a Pecan Research, Promotion, and Information Order to the USDA’s Agricultural Marketing Service. The newly proposed order would allow for the formation of the “American Pecan Promotion Board” and would oversee the assessments of both domestically produced pecans as well as foriegn pecans being imported into the US.
The proposal has been minimally discussed in public forums in the industry, but much of that can be attributed to the recent cancellation of events due to the threat of covid-19 spreading at large gatherings.
When the pecan growers formed the current federal marketing order back in 2016, a board was quickly appointed and growers got busy establishing an office, staff, and a marketing plan to move the demand needle for American Pecans.
Early into the first years of establishing what is now the American Pecan Council, a brave whistleblower came forward with evidence of a sheller board member attempting to utilize Mexican pecans in the place of American Pecans and still use the American Pecans branding and American growers assessment monies to market the product.
The maleficence of the board member brought to light the need for growers to have more involvement in their council and the need for oversight on their committees.
Since the inception of the federal marketing order in 2016, pecan prices to American Pecan farmers, have dropped steadily. A trade war and a global pandemic have added to the burden of the marketing order, however demand has been increasing. While pecan exports have declined, domestic pecan consumption has been growing. Prior to the federal marketing order in 2016 domestic consumption of pecans had been on a decline, according to the American Pecan Council. However, with marketing efforts underway the council has been able to increase awareness and ultimately consumption of pecans in the US.
Most growers, once enthusiastic about the marketing order, are now scratching their heads, wondering what has happened. As of this writing, farm gate pecan prices are at their lowest in years, and Mexican pecan imports at their highest in years. The increased demand for pecans in the US has brought with it, increased pecan imports. For years the shelling industry has utilized pecan imports from Mexico, largely because of the bargain prices. Pecans can be grown cheaper in Mexico than in the US and with a free trade between the two countries, it makes more financial sense for shellers to purchase low priced pecans from Mexican growers.
Not only does it allow for lower priced pecans from Mexico, it also pushes prices down for growers in the US. American Pecan growers, in an attempt to level the playing field, have come up with a solution to the problem. Currently American pecan growers are paying a 2-3 cent assessment on every pound of pecans they produce. This money is used to market pecans as well fund research studies for pecans. While the monies are going to good use, the benefit of these activities is yet to be realized by pecan growers. The newly proposed “Pecan Research, Promotion, and Information Order” would allow growers to assess pecans imported to the US contributing more funds to the marketing and research for pecans.
The commenting period for the “Pecan Research, Promotion, and Information Order” began back on September 22, 2020 and ends next week on November 23, 2020. By and large there have been comments of support, nearly every pecan grower organization across the US has posted a comment supporting the proposed order.
The Georgia Pecan Growers Association, the largest pecan producing region in the world, has sent in their letter of support, however, they have raised some very crucial questions about the details of the order, and how the board will be structured.
Most notably, in my opinion, is the board nominations. The concern over board nominations lies with the existence of grower board members who have more vested interest in importing and shelling of pecans, and less in the growing of pecans here in the US. Growers have already seen American Pecan Council growers seats filled with growers who have large shelling operations. While completely legitimate, smaller pecan growers feel their interest may not be served by a larger sheller who is also a grower. This can ultimately leave the council voting for interest other than that of the growers who fund the programs.
Another good question raised is about the existence of foreign entities on the board. This again could lead to American grower’s interest taking a back seat to pecan importer’s interest. The concern would be foreign companies voting to set the assessment rates on American pecan growers.
The structure of the board is weighted heavier with American grower seats containing 3 more than importer seats, but if the American grower seats are filled with even a few who have shelling interest, then this could possibly lead to a situation where American grower’s interest is not first at the table.
The Georgia Pecan Growers Association, has given their letter of support to the newly proposed “Pecan Research, Promotion, and Information Order” but have also raised some very crucial questions about its structure and operations.
The commenting period for the “Pecan Research, Promotion, and Information Order” ends Monday November 23, 2020. If you have interest in the pecan industry and would like to comment on the order, you can do so by clicking the link below.
