A recent article discussed an issue important to many farmers and small businesses across Georgia: the state of the pecan industry. Though pecans may not usually make the daily headlines, the fact is the industry has undergone rapid changes caused by growth in global demand over the past several years. That increase in demand has come largely from China and many wonder how the continued growth in demand will impact the diminished pecan crop this season.
According to recent reports, industry observers are worried that a summer of large rainfall totals across the region will combine with demand from China to create pricing issues with pecans, a major industry in the state. Georgia is the top-producing state in the country for pecans and a year of down numbers could spell trouble for Americans eager to bake a traditional pecan pie this holiday season. Figures indicate that the exceptionally wet summer may have done real damage to the state’s pecan supply. Last year, Georgia produced around 100 million pounds of pecans. Recent estimates peg this year’s crop at around 75 million pounds. This decrease in supply combined with increases in global demand could lead to a steep rise in the price of the nut, something that will likely come as a shock to U.S. consumers who have historically seen very stable pecan prices. The worry is that if prices keep rising, Americans will move away from pecans, substituting walnuts and other nuts into some favorite desserts.
A Wall Street Journal article from earlier this year noted how a pound of pecans for years sold for around $1.00 per pound, a figure that stayed remarkably consistent until the last couple years when the price doubled to more than $2.00 per pound. The reason is that Chinese demand for the nut exploded. In fact, last year saw a staggering 64 percent jump in pecan exports to Hong Kong.
The beginning of the boom dates back to 2007 when the price of walnuts, long a Chinese favorite, spiked. Chinese buyers went looking for something more affordable and latched onto the pecan, a nut that has long been produced and consumed almost exclusively in the United States. Turns out Chinese consumers love the pecans, believing they help promote brain function. China went from purchasing virtually no pecans in 2007 to now buying a quarter of all pecans produced in the United States.
This has led to pricing shocks for growers and American consumers. Though farmers in Georgia say they are planting more pecan trees, it takes between eight to 10 years for the trees to bear fruit, something that creates a serious lag time. As a result, land prices have risen dramatically for pecan orchards. In Georgia, pecan orchards hovered between $3,000.00 and $3,800.00 an acre five years ago. Today, they sell for between $4,500.00 and $6,000.00 an acre.
Experts say Chinese demand shows no sign of abating. While this is obviously good news for growers in Georgia, it does not bode as well for Georgian grandmothers who simply want to make a deliciously sweet dessert.