Where is the Bottom and Who is to Blame for the Low Pecan Prices

Pecan Producers, Shellers and Buyers .jpg

The current pecan market condition is a surprise to say the least. Most active pecan industry producers and sellers would have a hard time believing prices would drop this low if asked 6 months prior. However pecan prices on the farm have dropped significantly over the last few months and now has pecan producers and pecan buyers asking who or what is to blame. While the popular answer among pecan producer is “the shellers”, I have an alternative theory. I believe by in large the pecan growers are to blame for the low pecan prices. A little more than a decade ago, Chinese buyers showed up looking for an alternative to high priced walnuts and stumbled upon pecans. Since then for the first time in pecan industry history, the pecan shelling industry had competition when purchasing in-shell product which is sold directly from the growers cleaning plant. Once this began, on farm pecan prices began to increase forcing pecan shellers to compete with a buyer not in their inner circle. Since then, pecan growers have been more active in marketing their product, forming the US Pecan Growers Council, complying with government programs to utilize government funded marketing programs and so on and so forth. All the meanwhile ignoring the fact that 80% of the worlds pecans are sold without the shell. Now that the American Pecan Council has formed we have unprecedented cooperation in the pecan industry with a national marketing order and a large marketing budget. So why the low prices when demand continues to grow. The answer is simple, growers are marketing the wrong product to the wrong people. In the same way we don’t ask buyers to purchase the pecan while it is still on the tree, we shouldn't be asking buyers to purchase a 2,000 pound super sack of in-shell pecans that still need processing before consumption. The American Pecan Council is a huge step forward for this industry, but until pecan growers begin to market the correct product, we have essentially handed, a roughly, $16 million dollar marketing budget to buyers who have vested interest in paying as little as possible to the grower. There is a reason no other nut industry operates like this and it is the same reason pecan growers are now receiving less than any other nut industry while demand for pecans continues to rise.