Even as the global economic shutdown has struck fear and uncertainty into the hearts of investors and consumers across the globe, the pecan market has held firm, even increasing both demand for pecans in the face of the pandemic.
Many pecan growers across the southern US began farming pecans as an alternative crop to their farming operation, others began their pecan orchard as a second income from their second job. The 7-10 year time span coupled with the large capital requirements to bring a pecan orchard into commercial production causes the ownership of pecan orchards to be a bit of an elite group. Most pecan farmers today were “grandfathered” in so to speak, some have begun in the last decade, starting from scratch, but that is not the norm in the industry.
While it is expensive to bring an orchard into production the rewards have been fairly consistent over the last decade with RIO to pecan farmers being very attractive if you can wait 7-10 years for your return on investment.
Some pundits, and propagandists alike, have been claiming the pecan industry along with prices were set to plummet this season with huge market corrections coming down the pipeline. When the ensuing trade war with China failed to plummet market prices, the pundits and propagandist used the global coronavirus pandemic and the resulting economic shutdown as the catalyst that would be the final nail in the coffin for the growing pecan industry, sending pecan prices plummeting and demand for pecans to new lows.
Well here we are and the pecan market has done just the opposite. Even as the trade war did briefly and artificially lower pecan prices (on the farm only) in mid 2018 the market quickly recovered as demand continued to climb. While losing the single largest foreign market for pecans did stunt prices on the farm, the increased demand for pecans right here at home has outweighed the loss of the China market, pushing demand to new heights even during the trade war.
When that narrative failed to produce any results, the global pandemic became the new backdrop for visions of doom and gloom for the pecan industry, but that too has failed to come to fruition. In fact again, just the opposite is true. The American pecan industry has been able to continue to increase demand even through the global pandemic.
Shipments of pecans have continued to increase, Shelled pecan shipments are 2.4% for the season while in-shell pecan shipments are up 46.8% this season with an overall increase of pecan shipments of 8.2% over last year’s record setting numbers. While on the farm prices have slumped since the onset of the trade war this is due only to the smaller number of buyers in the market leaving farmers with less options to sell their crop. At the consumer level, prices have remained steady and demand has continued to increase.
The marketing activities by American pecan growers have continued to yield results for the industry.