Pecan prices to commercial growers have dropped to levels that are making it difficult for growers to find profitability in the orchards this year.
While some growers do have high enough yields to cover cost at today’s spot market prices many growers are right on the line of break even and many more are asking themselves should I continue to add orchards or plant back damaged trees when barely breaking even.
With the average 7 – 10 year waiting period for commercial pecan orchards to come into production it’s a big gamble with today’s prices to install new orchards and allocate the capital to get zero returns for that long as well as add to your workload.
The average price for pecans at the farm is between $1.50 and $1.80 per pound, and if you have a light crop this year, profits are hard to come by. Even if you have a good crop, profits are still thin at these prices.
Many growers around the industry continue to ask how we can have increased demand for pecans yet still see lower prices at the farm gate level. This conundrum leads me to believe we may have choke points in the supply chain that allows for increased consumption while keeping farmgate prices suppressed. Or it could just be that people refuse to pay higher prices for pecans.
If only we had a grower organization and a million dollar study of our industry that could tell us some of these needed answers. Did you catch the sarcasm in the previous sentence, because I was laying it on pretty thick. For readers who aren’t as familiar with the pecan industry, we actually do have organizations and they did spend a million dollars or more studying our industry, but since inception very little information has been shared with growers who actually fund the organizations.
Some people have begun suggesting that board members of both organizations should be required to publish their pecan sale prices and buyers to help restore some trust to the organizations, but to my knowledge there has been no serious discussion of this at the board member level.
