Drought and China push prices

The pecan harvest of 2011 produced great triumphs and tragedy for growers in the South.

In Georgia, irrigated orchards produced high-quality pecans in such great demand they attracted record-setting prices for the second year in a row. Wholesale per pound prices for early harvest peaked around $3.50 and settled around $2.50, with retail per pound ranging from $10 to $12.

Below, Some Georgia growers found the drought of 2011 to be beneficial as they didn’t have to spray as much. In Texas, the drought’s severity caused tree damage and loss that resulted in an expected crop loss of some 40 percent.

Demand for nuts was great as the drought affected many orchards that simply ran out of water. Texas was expecting an overall crop loss of about 40 percent due to extreme drought, with reports of no access to water and major tree loss. Meanwhile, global interest in pecans continues to grow, with the Chinese market purchasing about one-third of U.S. crops.

“We had the hottest, the driest, the windiest year on record,” says Tim Montz of Montz Pecan Company in Wichita Falls, Texas. “Our dry land crop was practically gone, and our irrigated land was about 10 percent off. Our water table dropped. The size was smaller, and the yield was way off.

“We had one of the worst years we’ve ever had, and I’ve been in business over 30 years,” says Montz, who works with his son Jake.

The Montzes experienced a shorter crop than normal the year before because of a hailstorm. Looking to next year, the two are planting more trees and focusing on the future, when drought conditions may not be part of the long-term forecast.

“We don’t have as much money for expansion as we’d planned, but we’re still trying,” he says.

The common denominator across the country for pecan growers was drought, and the deciding factor for success was water levels and access to them. While growers certainly cannot control Mother Nature’s dominion, they can do their best with the resources at hand, and we’ve asked growers and other experts for their advice in case drought conditions continue.

Harvesting pecans at the Miley Adams operation in Camilla, Ga.

In Texas, where drought and heat indexes were especially severe, Montz encourages growers to take special care of their trees, to keep weeds at bay, and to feel good about the rain that has fallen so far this year.

“It doesn’t take but a couple of rains at the right time to turn things around,” he says. “We just hope we get the rains we need. We have been getting a few rains this fall and winter so we are better off this year than we were at this time last year. You may have to cut back on some expenses like fertilizer, but cut back and watch your expenses. It sometimes takes two years to make up for one bad year.”

Georgia’s “on” year

While it was a record-setting year for the prices pecans earned in the early season, it was not the highest producing year; that was in 2007 with 150 million pounds. In 2011, Georgia produced about 100 million pounds.

A pecan harvester works its way through 1,200 acres of producing trees at Ellis Bros. Pecans in Vienna, Ga.

It was a good “on” year, though, says Lenny Wells, a pecan specialist for the University of Georgia’s College of Agricultural & Environmental Sciences in Tifton, Ga. Each year trees will produce either more nuts or more leaves because of crop load influencing. This was the year for nuts, and while the drought did make the nuts a little smaller, the quality was excellent.

Brad Ellis says dry conditions may have helped at Ellis Bros. Pecans in Vienna, Ga., an 1,800-acre orchard with 1,200 acres of producing trees.

“We didn’t have to spray as much,” says Ellis, referring to the potential need to spray for pests and disease that often comes with too much moisture. “We’re about 90 percent irrigated, so the drought didn’t hurt us as bad.”

Ellis’ trees produced 300 to 400 pounds more per acre than they did in 2010.

Georgia’s pecan orchards, primarily those that are irrigated, produced nuts of excellent quality and garnered their highest prices ever during the winter harvest of 2011.

His advice when considering the potential for another year of drought is to be careful with the water. Ellis uses his sprinkler system to water more during later summer, and he cuts back in the fall.

“It’s mainly figuring out how much water you need,” he says. “We’ve put in more efficient systems.”

Take spring slow

As spring begins to blossom, experts say to take it easy with plans for 2012. It is a bit of a wait-and-see game.

“There’s no need to fertilize when they come out,” says Larry Stein, Texas AgriLife Extension horticulturist in Uvalde, Texas, referring to early blossoms. “Basically, they’ll have some dieback in the tops. Then, wait and see. If they are coming out good, then step up your management program.”

After such a tough year, it can be tempting to jump the gun and begin watering immediately, says Wells. “If there’s a time to hold back money on inputs, it’s early in the season,” he says. “I wouldn’t say don’t water at all, but the demand isn’t that great until June. You can practice some water conservation until June. You’ll need water later in the season for sure.”

Perhaps a silver lining of the drought season was tree loss, as it creates opportunities to plant new trees.

“If the drought took out the trees, they probably should never have been planted in the first place because of soil quality,” says Stein. “People are spending $400 to $800 per acre a year to take care of a tree and getting nothing back. You are giving all of that input for nothing.”

Managing water

Most expect drought conditions to continue. Groundwater levels, rivers and streams in many areas are still low. New rainfall has encouraged many this year, but some growers are already hedging their bets by drilling wells or installing irrigation systems if they don’t have them already. Wells estimates that about 80 percent of growers in Georgia are irrigated.

“The benefits of irrigation far outweigh the cost of putting the system in,” says Wells. “Your production increases dramatically, the quality gets better, and you get more consistent crops as well.”

Georgia’s Pecan Boom Inspires Thieves

Bucky Geer hadn’t planned on being known as the Georgia grower who had his nuts stolen. However, he and other pecan farmers made national headlines in December when the combination of great demand and limited supply drove prices north. The story even made the pages of The New York Times.

“This is something that happens here this time every year,” says Geer, who farms 1,400 acres. “I think there are more people out of work, and the price of pecans made it very tempting to steal. It just amazed me how many folks they were catching stealing them.”

Throughout the state, incidents of pecan theft were about double what they had been in 2010. Authorities were taking a tough stance. In one case, an engaged couple claimed they were snagging pecans for holiday pies and offered to give them back, but they were still charged. In another, one person was caught stealing 1,400 pounds of nuts. At $3 a pound, that recovered $4,200 right there.

Geer is one of six farmers who pooled their resources to hire off-duty firemen to patrol their orchards during the harvest season. The effort resulted in 180 arrests. “We saved that many nuts from being stolen, so it didn’t cost us anything,” he says.

Brad Ellis of Ellis Bros. Pecans in Vienna, Ga., says there were not as many pecan thieves caught at his orchard in 2011 as there were in 2010. He has posted signs around the orchard.

“You never know how much theft you have until you catch people,” he says. He says his orchards were patrolled well, and his operation gathers nuts pretty quickly after they are shaken from trees to give thieves a limited window of opportunity for gathering.

He has been studying ways growers can cut corners with irrigation costs and still produce quality pecans.

“We are targeting the early season from April to June as a time when we could cut back on water we would normally use,” he says. “Until that point the demand for water isn’t that great.”

While cutting back in irrigation did not appear to affect the quality of the pecans, Wells found the greater impact was a decrease in cost and water usage that could benefit growers.

“If your irrigation was marginal, it showed up in your production,” says grower Bucky Geer of Albany, Ga., who lost about 35 percent of his crop to drought conditions. He is putting in two new wells to gain greater access to water for his 1,400 acres. “The only thing I know we can do in addition to keeping competing grasses away is to increase water availability in the fields.”

Randy Hudson of Hudson Pecan Company in Ocilla, Ga., says his farm is not dependent on rainfall, but he is still putting in five wells because of such low water levels caused by the Atlanta metro area upstream.

“After the last few years it’s pretty obvious to us we’re in a prolonged drought situation, so we are trying to make sure our wells are deep enough,” says Hudson, whose producing orchard is more than 1,000 acres. “We don’t water unless we need to water. When we do water it’s with drip systems; we don’t use sprinklers because they are less efficient, and drip cuts down on evaporation.”

Pecan stays powered up

The pecan’s appeal continues to be documented both domestically and internationally.

Consider these highlights from the USDA:

  • Pecans are regarded as the most important commercial nut crop grown in the eastern United States.
  • The United States produces more than 80 percent of the world’s pecans.
  • The 2010 U.S. crop was 259.7 million pounds valued at $556 million.
  • The United States exported 40,622 metric tons of unshelled, or in-shell, pecans valued at $143 million. The United States also exported 12,948 metric tons of shelled pecans valued at nearly $109 million.

Hong Kong was the top buyer of U.S. in-shell pecans in 2010, and that was before record-setting per-pound prices set in 2011. The top buyer of shelled pecans was Canada.

In October, the University of Georgia received a $1.2 million Specialty Crop Research Initiative Awards grant to document present-day commercial and newer early-harvest pecan cultivars to support the U.S. pecan industry and its domestic and international marketing programs.

Specialty Crop Block Grant Programs relating to pecans were awarded in five different states in 2011.

In 2009, pecans were included among those crops covered by the Federal Crop Insurance Program.

Growers across the country expect the Chinese market to grow, and marketing efforts in India continue. The combination of demand and limited supply mean the price will continue to be right for growers, and that’s some of the really good news.

Jennifer Paire is a freelance writer based in Canton, Ga. Curt Harler, who has a B.S. in agriculture from Penn State University and an M.S. in ag from The Ohio State University, is a full-time freelance writer.