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Pecan Supply and Demand May be at Odds in 2019

The pecan market has been on a bit of a roller coaster ride over the past few years with demand skyrocketing faster than pecan producers can plant new acreage. However the end of 2018 brought prices back into check when the trade war between China and the US escalated resulting in a 571% increase in the tariff paid on pecans entering the Chinese market when of US origin. The tariff prior to the trade war had recently been lowered to 7% from 10% largely influenced by the US Pecan Growers Council’s work with Chinese officials. Currently the tariff sits at 47%. While pecans are not the only tree nut to incur tariff increases, the American pecan does seem to be affected more heavily by the Chinese tariffs when compared to other nuts exports to China such as almonds and walnuts, where shipments have been affected, but still remain vastly more stable than pecans. While China did purchase a significant amount of pecans last season, as well as most of the South African crop this year, supplies are dwindling and will most likely be completely consumed by the end of the Chinese New Year. Similar to the US holiday seasons of Thanksgiving and Christmas nuts sales spike during the Chinese new year as nuts are popular gifts given at this time. The real concern for the pecan industry will likely come in the next months. With an estimated 50 million pounds of pecans removed from the market in Georgia due to hurricane Michael, an estimated 8 million pound shortage in Oklahoma, and an estimated 5 million pound loss in Texas due to flooding and excess rains, one could only deduce that there will likely be a shortage of pecans before the South African pecan harvest arrives. While Mexico does have a larger crop this year, many producers tell us quality has been off significantly in some areas. The demand for pecans is continuing to grow in both the domestic and international markets, a key challenge for pecan growers will be to figure out how to get more pecans into production faster.