Pecan farmers have seen their share of ups and downs over the past decade with farm gate pecan prices dropping sharply shortly after the first round of tariffs during the trade dispute between China and the US.
Farm gate pecan prices have seen a strong recovery this year with an expected much shorter pecan crop than in previous years. Demand in the domestic market has been strong, with success from the APC marketing campaigns, domestic consumption has been on the upswing, but pecan prices on the farm have gone from low to lower until this year. Decent demand coupled with smaller supply has pushed prices to the highest levels in 4 years.
June of 2018 was the last time farm gate pecan prices hit these levels. Today farmgate in-shell pecan prices have reached a $2.35 average price per pound. Stronger farmgate prices allow growers to invest more into orchards, but this year may not be as favorable due to higher input cost.
Nearly every single input on the farm has increased significantly. Diesel prices are at the highest levels in 7 years, however most other input costs have also risen. Labor prices are higher, fertilizer prices are the highest they have been since 2012, and chemical prices are significantly higher following surging fuel and transportation costs.
The price recovery for pecans has come just in time, if prices had stayed in the $1.50 range with input cost surging, we likely would see many smaller growers, which make up 85% of produced pecans, put little to no inputs in the crop this year. Even with the price recovery for pecans, we still see growers making cutbacks with surging input costs.
The export and domestic markets shipments are down for the year, however last season was the highest recorded since the trade war. The APC, now focusing marketing solely on the export markets will hopefully be able to reopen the China market for US pecan growers.
Prior to the trade war, pecan shipments to China were surging, utilizing nearly 80 million pounds of in-shell per year. Much of that business went to Mexico where import tariffs for pecans were not affected.