Outreach helps expand markets, keep prices solid

Pecan growers expected the highest per-pound pricesto date last year thanks to their biggest customer:China. “The pecan industry has caught fire and theprice of nuts is up, orchards are growing, and the excitementin the industry is up,” says Bill Goff, grower, AuburnUniversity professor and consultant to the industry. “If thepace of sales were to continue, China could buy half ofthe U.S. crop, and this has just developed in the past fiveyears.”

Auburn University Professor Bill Goff, a pecan specialist and grower, meets with pecan buyer Stephen Tong of Hong Kong and Wei Xiao Fong at her processing plant, Tien Zhu Foods, Inc., in Zhuji, China. Fong’s plant has processed and roasted pecans from Georgia.

Industry-led promotions of the health benefits of pecans and marketing efforts to other countries, primarily China, are paying off.

In 2009, about 88 million pounds of pecans were exported to China by U.S. growers, up from 1.8 million in 2005.

The nut caught on as a snack in China, where it is soaked in flavoring solution inside the shell and sold in cellophane bags.

“In China, they value age, and I am told by the Chinese buyers that among nuts the pecan has become associated with longevity,” says Goff, who has been in the industry for 30 years and starting growing pecans five years ago. He now manages 2,000 acres in Georgia and Alabama, and has been to China twice to promote the industry. “We think this thing will keep rolling,” he says.

Georgia is the largest producer of pecans in the country, followed by Texas and New Mexico. Growers across the country have their fingers crossed that they will continue to feel the effects of the fervor.

Boxes of roasted pecans, packaged by Zhejiang Yi Wu Yi Ming Food Company Ltd. in Longgang, China, await shipment to retailers. Pictured in the background are pecan buyer Stephen Tong of Hong Kong, Zhejiang owner Fang Yi Min and Lenny Wells, an assistant professor and pecan horticulturist at the University of Georgia and adviser to the Georgia Pecan Growers Association.

“I don’t think we’ve reached our peak level of this product taking off,” says Trent Mason, whose family-owned pecan business has 1,800 acres, including 1,600 acres of producing trees, in Fort Valley, Ga.

“There’s a lot of excitement about the export market – not just to China, but other countries including India and Canada,” says Mason, partner and farm manager for Mason Pecan International. “There are a lot of new faces because of the higher prices we are getting, but for us it’s the same job every day from daylight to dusk.”

Learning curve

The 2009 harvest was the first with production sent to China for Montz Pecan Company in Wichita Falls, Texas.

“It’s pretty easy for us to get rid of our entire crop, but the way it happened, we got a better price for everything,” says Jake Montz, whose operation has 1,000 acres of producing trees. Montz’s father, Tim, is president of the Texas Pecan Growers Association. “It’s one of those things that is growing so fast, and everyone is planning for the future and planting orchards.”

Securing contracts, certifications and the logistics involved in the Chinese exports create a longer cycle of turnaround. Montz says it takes about 30 days for a container of nuts to reach the country.

“The Chinese are very particular about what they want and expect, which is good,” says Montz. “They want everything in writing.”

Growers were expecting per-pound prices around $2 last fall. The average price has been above $1 since 2002, with the highest price at $1.73 in 2004. According to Lenny Wells, assistant professor and pecan horticulturist with the University of Georgia, one of the most unusual byproducts of Chinese interest in the last harvest was a late-season price increase.

“We started relatively high in price, and it dropped some, but later in the season the price rose again,” says Wells, who is also adviser to the Georgia Pecan Growers Association. “Later into December, the price rose again, which has been almost unheard of in the pecan industry. But there was such a demand, and there were so many going to China, the growers were able to get better prices.”

Like many growing industries, the cost of producing pecans has increased from about $800 an acre in 2002 to between $1,200 and $1,500 an acre.

“So, keeping the price up has kept the industry going,” says Wells. “There’s always concern with just that one country buying so many pecans. The growers are very grateful and happy, but don’t want to depend on that whole country.”

Cindy Wise, executive director for the Texas Pecan Growers Association, says growers across the country are lobbying for federal funds to continue international marketing.

Domestic market

National consumption of pecans in the U.S. has been steady and is expected to grow fueled by continuing studies and reports of the nut’s health benefits.

“As healthy as the pecan is, as the number one nut in antioxidants, you’d have to eat three times the amount of almonds to compare to pecans,” says Hilton Segler, 40-year industry veteran and past president of the Georgia Pecan Growers Association. Segler is credited with initiating pursuit of China and other international markets.

“With the research our industry has developed and paid for proving the health benefits of pecans, we’re beginning to share this health information and the use of pecans as a healthy snack food all over the world,” Segler says.

Studies continue to affirm the antioxidant power of the pecan. For example, a study by the Center for Cellular Neurology at the University of Massachusetts in Lowell suggested that pecans could delay the progression of age-related motor neuron degeneration.

Growers don’t have to sell to China to feel the international impact on demand. Joe Massey of J-D Pecans in Uvalde, Texas, sells to wholesale buyers in the U.S. “This has kept prices at a very nice point,” says Massey.

Massey has more than 200 acres in production and is a member of the board for the Texas Pecan Growers Association.

New development

While it is not unusual for growers to continue planting trees in their orchards, insiders say there is more planning taking place than ever before.

“We have a lot of new pecan acreage being planted in Georgia over the last two or three years as a result of the interest in the export market,” says Wells, who surveyed growers attending extension events. “We were looking at about 2,500 new acres of pecans in Georgia, but I think that is a conservative estimate. All of our pecan nurseries are sold out every year.”

Georgia’s pecan acreage has hovered around 140,000 acres for about 20 years, with orchards sometimes overtaken by development. “I think we are starting to overtake that now,” Wells says.

As a consultant to the pecan industry, Goff has developed a specialty for renovating orchards.

“There are many orchards in Georgia that are not even getting managed,” he says. “Most are badly overcrowded. If you do it right, you can renovate older orchards and never interrupt cash flow. You don’t run up any debt at all, so you kind of get the orchard for free.”

Massey planted about 800 trees a few years ago. “I could put in another 800 to 1,000, depending on how the economy goes,” he says. “Expansion has been difficult to categorize because of the economy the past two or three years, but our industry has got plenty of positive pressure to expand in the foreseeable future, even in this economy.”

Segler, who spoke before the U.S. House of Representatives Committee on Agriculture about the industry, believes growers will be able to handle the increasing demand.

“We have been keeping up with supply and demand,” he says. “Georgia planted an additional 5,000 acres this past year. The only reason they didn’t plant more is the trees have been in very short supply. We suspect there will be 5,000 to 10,000 acres added per year.”

Jennifer Paire is a freelance writer based in Canton, Ga.