Lower demand, higher supply, might mean lower pecan prices, just as Americans are gearing up for fall pecan treats.
Pecans were one of the numerous agricultural products that tariffs were raised for China.
China, which is the top buyer of U.S. pecans because whole roasted in a shell, pecans are a delicacy for Chinese New Year festivities.
Last fall, it had a 10 percent import tariff on U.S. pecans.
Texas Pecan Growers Association Executive Director Blair Krebs said there was a drastic jump from the beginning of the year, to this summer.“We went from a seven percent tariff to a 47 percent tariff and we’re coming into harvest season right now. So, that’s a blow that pecan growers are taking coming into the biggest marketing season for them,” said Krebs.
She estimated that China buys about 30 percent of the US crop.
“When you take one of the largest customers in an industry and it gets pulled out, that could mean definite lower prices for growers. It could be a detriment to them,” said Krebs.
She said it could change the way business is done. Some growers might hold their crops until later in the season to wait for higher prices.
U.S. Department of Agriculture reports the average price per pound of pecans sold in the shell was $2.40 last year.
Last decade, it was $1.23, reportedly when China started to buy large quantities of the crop.
It’s reported that pecan halves and pieces have already dropped in price by about 12 percent since earlier in the year.
Krebs said the Ag department has released some trade mitigation and grant opportunities for pecan farmers affected. And, a federal marketing order has been passed that helps market pecans throughout the rest of the country, not just the South.
Texas growers harvested $85 million worth of pecans in 2017, making it the third state in the country for pecan production behind only Georgia and New Mexico.
China will probably now buy from Mexico and South Africa.
Pecans can freeze for two years, so you might want to buy now and save.
Krebs said they’re in a “wait and see mode” right now. It will be years until we realize what the benefit (of the trade war) is going to be.