Why Are Pecans So Expensive? (Top 10 Reasons)

 

A part of certain Native American diets for centuries, the pecan became an important agricultural commodity in Georgia in the late 19th century.

While we have legendary tales about George Washington and the cherry tree, Jimmy Carter grew up shaking pecans from trees on his family farm long before he headed to the White House.

The pecan has been adopted as the official “nut” in a few states.

Tasty in a pie, the pecan comes at an expensive price.

Here are 10 reasons that pecans are so expensive.

 

Why Are Pecans So Expensive? (Top 10 Reasons)

 

1. Limited Growing Area

ripening Pecans

 

The original area where pecans grew includes portions of the present-day southeastern and south-central United States.

Native Americans cultivated and harvested pecans long before European settlers crossed the Atlantic Ocean and established colonial settlements.

These indigenous populations consumed pecans in areas where they grew and traded them with other Native American populations as part of their trade networks.

Spanish conquistadors who arrived in Florida in the early 1500s and explored the Gulf Coast in subsequent decades had an interest in pecans.

Similar to corn and potatoes found only in the New World, Spanish explorers brought pecans back to Europe.

Today, pecans are regularly harvested in orchards and on farms within 15 US states.

These states include many in the South, spanning from the Carolinas to Arkansas and Texas.

In addition, farmers in Arizona, California, and New Mexico have started to raise successful pecan crops.

The United States leads all nations in producing pecans, with more than 80% of the global market coming from this country in recent years.

Harvests from the US tend to fall between 250 and 300 million pounds per year.

Within the US, farmers in Georgia harvest most of the pecans.

Texas farmers are right behind Georgia in pecan production.

Soils from the floodplains near river bottoms have the perfect mix of nutrients to support the growth of pecan trees,

Pecan trees easily soar above 100 feet in height, with roots that can plunge 20 feet into the ground to anchor the tall trees.

The most vital roots are those within two feet of the surface.

Pecan orchards now exist in other nations where temperate regions offer the best chance for trees to grow.

These nations include Argentina, Australia, Brazil, China, Mexico, Peru, South Africa, and Uruguay.

Despite the international reach of pecan farming, the majority of the world’s pecans continue to originate in the United States.

 

2. Time Required To Grow Crops

ripe pecans nut on the tree

 

Unlike some crops and other trees that bear fruit or vegetables, cultivating a pecan orchard requires an investment in time.

Newly planted trees may take three to four years before they bear their first pecans.

Farmers probably should budget close to a decade of nurturing and caring for the sapling before it can produce a steady supply of pecans.

Workers must prune the branches of young trees so they will grow thick and strong.

This must happen for years before the first successful pecan crop to ensure better crops and prevent diseases from harming the tree.

Even with all of the mechanical equipment available to farmers today, these orchards require regular inspections, large amounts of water, and substantial acreage of land.

When trees begin to produce pecans, harvests in the southeastern US start in September and October, meaning farmers must carefully time the maturation of other crops so they can devote attention to pecans.

Arizona pecans may peak as late as March.

Pecan trees need to stand close to each other so bees can pollinate them.

Higher quality pecans result when cross-pollination between different pecan varieties occurs.

Pecan trees cannot self-pollinate, and male and female flowers tend to bloom at different times in the year.

Pecan trees are “alternate bearing,” meaning that they often go through cycles in which a heavy crop year is followed by a lighter one.

This up-and-down cycle of pecan productivity explains the importance farmers place on creating a landscape that stores the nutrients the trees need to thrive.

Agricultural scientists still do not understand the specific reason pecans are alternate bearing.

The time and effort required to bring a bountiful harvest to market explain why many farmers avoid growing pecans, preferring nuts that mature faster.

 

3. Growing Awareness Of Health Benefits

holding white pot with pecan nuts

 

Pecans have become a part of the natural food movement.

Those grown without chemicals offer a healthy source of nutrients.

As plant-based diets grow in popularity, pecans play a premium role in these conversations.

Increased consumption of pecans by those seeking healthy natural foods has placed pressure on available supplies since the time required for trees to reach maturity cannot change overnight to accommodate growing demand.

Many grocers and natural food stores package pecans as luxury nuts.

Touting their taste and nutritional value, these items command high prices at the supermarkets that carry them.

Stores often mention that pecans are an excellent source of monounsaturated fat, a healthy type of fat.

Pecans that are not genetically modified have many valuable vitamins, minerals, fibers, proteins, and healthy fats.

These qualities increase their market value, calling for higher prices from stores that make them available for purchase.

 

4. International Demand

Retail store bags of Honey pecans

 

In addition to the growing demand for pecans among the health-conscious in America, this crop has won widespread acceptance as a tasty food source throughout the world.

Production bottlenecks resulting from the time young trees need to reach maturity have prevented supplies from expanding to meet this ever-increasing global demand.

The United States and Mexico remain the top producers and consumers of pecans.

Demand here and elsewhere soars faster than trees can grow.

As new markets for pecans have appeared, the traditional balance between supply and demand has substantially changed.

China now ranks among the top 10 pecan importers.

That nation’s growing economy allows Chinese importers to pay higher prices to ship American pecans to their nation.

As more foreign markets claim a larger proportion of the American pecan market, domestic prices will remain high.

China’s interest in the pecan began a little more than 15 years ago.

Although a few pecan trees had arrived in China earlier in the 20th century, they were generally used as street trees and never delivered a notable crop.

At a 2006 food trade show in Paris, Chinese buyers met with an agricultural official from New Mexico and learned about the yummy pecan.

After opening and tasting these nuts, the Chinese visited New Mexico to meet growers and inspect their pecan orchards.

China’s burgeoning middle class heard about the health benefits of this unfamiliar commodity.

Soon, imports to China cracked all records.

Considered a novelty item 15 years ago, pecans now appear in grocery stores throughout that nation.

In 2009, China bought almost 88 million pounds of this crop, an amount that corresponded with the entire harvest from Georgia that year.

In 2017, more than half of the pecans America exported went to China.

During that same year, pecan orchards covered almost 100,000 acres of land in China.

This nutty transition on farm tracts has redefined Chinese agriculture, while still guaranteeing that a large number of American pecan exports will continue to travel to Asian markets.

As these pecans leave American soil, the remaining harvest sells at a higher price in domestic markets.

 

5. Vulnerability To Weather

Grass with rain drops

 

Weather conditions play an important role in a plant’s ability to reach maturity so it can produce pecans.

Pecan buds are very susceptible to damage from freezes.

Studies show that freeze damage leads to less productive pecan harvests.

Spring freezes and extended wet seasons can reduce pecan blooms.

Excessive dampness may affect a tree’s ability to grow to the stage when pecans begin to appear.

Dry spells in California and Texas, as well as water shortages in the desert southwest, have impacted both the number of pecans harvested and the quality of the nuts sent to market.

Droughts also have the potential to slow crop development, leaving the pecan farmer with an orchard that requires water and regular attention but is unable to bear pecans to make up for the required investment of time and resources.

While the relative scarcity of pecan yields resulting from weather events allows farmers to receive more money for their crops, the long-term challenges of unpredictable weather and climate change may jeopardize the industry in some places where it currently flourishes.

 

6. Hurricanes Do Not Help, Either

Eye of the Hurricane

 

Pecan farming families that have thrived for a century could see the family fortune change forever due to strong winds and rain.

Hurricane Michael carved a disastrous path through the heart of Georgia’s pecan country in October 2018.

Within a few hours, the Category 4 winds toppled trees that had stood for a century and tore pecan shucks from the tree limbs.

As winds increased, branches tore from their trunks and trees fell to the ground.

With hurricanes such as Matthew in 2016, Irma in 2017, and Michael in 2018 targeting fertile pecan forests, many farmers had to seriously consider whether to replant or take a different path.

Uprooted trees require years to replace.

Many of these farmers cannot put their economic lives on hold for a decade as new saplings mature into pecan-bearing trees.

Federal relief funds cannot expedite tree growth or save orchards that hurricanes have obliterated.

Hurricane Michael’s aftermath left a devastating legacy.

Nearly 55 million pounds of pecans almost ready for harvest were ruined.

The storm claimed 740,000 trees and wiped out $560 million in projected economic activity.

Losses included more than these raw numbers.

With expectations that the Fall 2018 crop would be one of the best in decades, Michael hit the area at a time when most farmers had harvested less than 5% of their orchards.

Many of the pecans that fell onto the ground rotted.

This tragic event came a year after Irma had damaged or destroyed almost 30% of the previous year’s crop.

The loss of these harvests led to higher prices.

In some cases, it also led to the loss of pecan farmers.

 

7. Process Of Harvesting Them

Pecan nut producers, with the first harvest of the year

 

A large part of the frustration that weather events such as hurricanes cause is the difficulty of harvesting pecans.

This process requires more than the mere picking of pecans, similar to the way one might pick apples from a tree or strawberries from the plants on the ground.

The cycle of tree trimming, fertilizing, irrigating, spraying, and managing weed control keeps many orchard operators very busy.

When harvesting time arrives, the workers shake the nuts from the tree, pick them up, clean them, dry them, size them, and sort them for sale.

Pecans allocated for retail sales may be removed from their shells and baked before they are bagged and shipped.

This labor-intensive process takes time and costs money.

High-quality pecans cannot be grown in a lab.

Trees require a specific climate and exact soil conditions to produce a high yield.

Automation and new technologies may help in some phases of the harvest, but much of the work remains manual and time-intensive.

 

8. Pressures On Small Farmers

harvesting Pecan nuts

 

Recent hurricanes and growing climate uncertainties have changed the landscape.

Orchards that had thrived for generations disappeared almost overnight.

While some larger agribusiness conglomerates may have the time and resources to wait for damaged orchards to return, smaller farmers must make a difficult decision.

Most of them cannot wait a decade for new trees to take root and bear pecans.

Some of them may decide it is time to sell the farm and find another line of work.

Another pesky problem confronts pecan farmers.

The presence of insects always requires great effort to confront.

Smaller farmers might have to do a cost-benefit analysis to decide whether it makes sense to plant new trees and wait upwards of a decade.

No matter what they decide, short-term prices remain high.

Whatever they do decide may have a pronounced effect on prices in the future.

 

9. Pressure To Diversify Crops

PECAN NUTS IN THE HUSK ON THE TREE

 

With the time required for young trees to mature and bear fruit, the labor and care required to maintain orchards, and weather events that can eradicate well-established trees in an afternoon, many farmers have pondered whether it makes sense to continue cultivating pecans.

Yes, pecans can command a high price on the market.

However, a single tornado, tropical storm, or hurricane could destroy an orchard in less than one day.

Some farmers have started to consider if they should grow more nectarines, peaches, and plums rather than the pecans that their great-grandparents relied upon more than 75 years ago.

Does it make sense for these farmers to continue putting in the time and effort to get these luxury nuts to market?

Would autumn be the same without pecan pies on the dinner table?

Some farmers remain committed to growing pecans on their land.

They recognize the steady demand for premium products among a certain consumer demographic.

These are the shoppers willing to pay top dollar for premium produce and luxury farm products.

They know their fresh pecans fall under this category of premium foods.

Farmers willing to keep their faith in pecans will set aside precious acreage for pecan orchards.

Others have chosen a different path.

This second group of farmers realizes that the years required for young saplings to reach maturity amounts to a period of up to 10 years when yields from their lands will be incredibly low.

Instead of betting on a bumper crop of pecans a decade from now, they diversify their crops and trees today.

As more grove owners move away from pecans, those who remain will have to meet increased demand.

This is a nearly impossible task, for sure.

 

10. Lack Of Price Support

handful of pecan nuts in shells

 

Despite their health benefits, these tasty nuts are not eligible for agricultural subsidies or other price controls that would make them affordable to a larger segment of the population.

Realizing that they have to wait a long time to recoup their investment, pecan farmers try to get their products to market as soon as possible.

This is where brokers play an important role in setting the price farmers get for their crops.

Other agricultural commodities have government officials and/or a centralized authority within the industry that exercises some level of control and price support.

A great example of this is the sugar industry in the United States.

“Big Sugar” plays a significant role in establishing sugar prices for the cane grown in south Florida, mostly between Lake Okeechobee and the northern boundary of Everglades National Park.

This name is given to a small group of large conglomerates that manage some of the largest sugar producers in the United States.

When Big Sugar speaks, the Florida legislature and governor compliantly listen.

Similar cooperatives exist for other agricultural commodities, but not for pecans.

As a specialty crop, pecans require production practices that are more labor-intensive and much more susceptible to weather events.

Without any governmental price support, there is no subsidization of prices for domestic consumers.

Along with the lack of subsidies, another issue complicates the market forces that determine the price of pecans.

High tariffs, especially with China, influence the cost of this commodity as well.

Escalating trade wars with China in early 2018 had the effect of raising pecan tariffs by upwards of 47% in some circumstances, stagnating the market at a time shortly after many pecan farmers had expanded their orchards.

Then Hurricane Michael came through Georgia later that year, wiping out much of the harvest.

While other agribusiness interests affected by the trade war with China received assistance, pecan farmers did not.

The federal government gave soybean farmers in the Midwest a $6 billion bailout when the trade war led to fewer soybeans heading to China.

Rather than a bailout, pecan farmers were allowed to sell to the federal government any surplus that China did not buy.

The uncertain status of tariffs and trade wars leaves much unpredictability in the market.

One thing does remain certain, however.

Pecan prices will remain expensive into the foreseeable future.