Domestic demand for pecans continues to be the new engine for growth in the industry as pecan exports wain with trade wars and purchases shift to Mexican pecan producers.
The American pecan industry has seen significant growth over the past decade when pecan growers finally decided to stimulate demand for pecans and find new markets for America’s only native tree nut. Around 10 years ago pecan growers decided they had to do something about the constant low prices of pecans on the farm. Each year around harvest time pecan growers got the same old story from the limited pecan buyers, that there just wasn’t any demand for pecans.
Some growers sell their own pecans locally, but for most pecan growers, opening a retail outlet was not an option, with year round maintenance in the orchard most growers have their hands full growing and harvesting their pecans each year.
Thats around the time growers decided to form the US Pecan Growers Council and pool their resources to market pecans around the globe and find new markets to help stimulate demand. A few short years later the growers council had found their markets. Europe quickly became a growing market for pecans, but it was China that became the aggressive buyer of pecans.
China quickly developed a taste for pecans and exports grew exponentially. China quickly became the largest export for many growers and the new competition for US pecans drove prices to much more profitable levels. Even US buyers were forced to raise their prices in order to compete with the new export markets.
But that has changed quickly with the onset of the US/China trade war. Since the trade war began between the US and China, pecan exports have plummeted to the lowest levels in nearly a decade. But growth of the pecan market has not. Knowing that they could not be dependent upon one market for growth, the pecan growers decided to develop a marketing order to further their success in building demand for pecans. Back in 2016 US pecan growers formed the federal marketing order that we now know as the American Pecan Council which oversees the marketing and research activities of American Pecans.
Since the inception of the marketing order, pecan growers have been able to open more new markets for pecans with the biggest market existing right here at home. With domestic demand for pecans stagnant and even declining, the American pecan growers set out on a campaign to build domestic demand, and not a moment too soon. As the trade war all but shut down pecan shipments to China, the new found growth in the domestic market has continue to drive overall demand increasing year over year. Even with the loss of one of their largest export markets, demand American pecans has continued to grow.
The 2018-19 pecan season was a record breaking year with demand increasing to new heights and this year is shaping up to continue that trend. So far this year pecan exports have fallen by 12.5% from approximately 69 million pounds down to 60 million pounds with a loss to date of 8.6 million pounds.
However demand is still up, total shipments to date are up 24.1% from approximately 211 million pounds to a staggering 262 million pounds representing an increase of just under 51 million pounds to date over last year.
Domestic shipments are the driver behind the growth representing an increase of 41.8% over last year’s record highs. Domestic pecan shipments have grown from approximately 142 million pounds to 201 million pounds for a total increase of 59,806,947 pounds.
While the growth in demand is focused here in the US, the export markets are still expected to produce positive results this year. The phase one trade trade deal between China and the US is expected to yield good results for crops like Almonds and Pecans as China has agreed to purchase large sums of US ag products. China has already implemented the tariff exclusion application for Chinese importers of US agricultural products. While not many pecans have been shipped to China this year, that is expected to change.
The coronavirus has no doubt left economies around the world in a much different position that a few months ago, but so far the results have not negatively affected the pecan industry, in fact many growers in the food industry have seen an increase in demand, with shortages of labor available to harvest. With the largely mechanized harvesting of pecans labor will not be a significant issue for tree nuts.