Pecan Crop Promising
The New Mexico pecan crop looks promising in an "off" year.

Is 2017 looking like a bumper year for pecans?

In mid-July the first estimates of the size of the 2017/18 crop were released, and if those numbers hold true, the U.S. will produce an estimated 270 to 280 million pounds of pecans, most of which will be from the Southwest region

Late summer is generally when pecan growers are sizing up their current crop, checking trees for nut load, overall development, and pest and disease pressures as they monitor markets for early signs of demand and nut prices.

Behind Georgia, New Mexico and Texas are the No. 2 and No. 3 largest producers of U.S. pecans respectively, while Oklahoma, Arizona and Louisiana all produce significant pecan crops each year, making the greater Southwest region one of the leading areas for U.S. pecan production. According to growers across the Southwest, if early signs of crop and market growth are correct, the 2017/18 season could be a good one—if all the cards fall right.

Earlier this month, USDA released numbers on last year's pecan crop, revealing 2016 was a good year for strong prices and high demand. A high of nearly $3 a pound for high quality nuts were reported at the height of last season. Overall, New Mexico growers, known for the superior quality of their pecans, received an average of just under $2.94 a pound for the year, a record high.

ON AND OFF

According to USDA, U.S. pecan growers produced about 292 million pounds of in-shell pecans in 2016, which was largely viewed as an "on year" for pecan production. Pecan trees alternate between “on years,” with moderate to good nut production, and “off years,” with lighter production. But because of the diversity in variety and geographic growing areas, an "on year" in one state may be an "off year" in another.

To gauge the importance of pecan production across the southwest region, in recent years nearly 170 million pounds of pecans per year were produced across the region, including Texas, Oklahoma, New Mexico, Arizona and Louisiana, representing about 59 percent of the average total annual pecan production in the United States.

In mid-July the first estimates of the size of the 2017/18 crop were released, and if those numbers hold true, the U.S. will produce an estimated 270 to 280 million pounds of pecans, most of which will be from the Southwest region.

STRONG PRICES EXPECTED

While strong prices are expected for this year's pecan crop, many growers across the Southwest are concerned that while demand, both domestic and international, has demonstrated some growth over the last two years, the exceptionally high prices for U.S. pecans could force large nut buyers to purchase more walnuts and almonds to avoid higher pecan prices. The end result could be a rapid decline in pecan prices if that trend were to continue.

"I'm happy when pecan prices are strong, of course," said John Clayshulte, a New Mexico pecan producer who grows nuts on his farm near Las Cruces. “But there is such a thing as prices being too high."

What creates the conundrum, according to New Mexico State University agricultural economists, is that the price of any commodity can rise only so far before consumers change their buying habits. The same holds true for restaurants and food processors who use pecans to mix with other food products. If the price of pecans gets too high, companies, as well as consumers, may choose to use fewer pecans or switch to a different and more affordable nut as a replacement.

To add to concerns, China, a major buyer of U.S. pecans in recent years, has slowed its demand for U.S. pecans, and according to some, has found alternative sources for pecans in new pecan-growing regions. In recent years, for example, Mexico has ramped up pecan production and has entered the international market. As production in Mexico rises, it could force pecan prices lower as a result of market competition.

STRONG DEMAND

Nonetheless, marketers say as of right now demand remains strong for high quality nuts, and if early signs are any indication, demand will still exceed supply this year, potentially making 2017/18 a good year for U.S. pecan growers. Economists warn, however, that pecans from the 2016 growing year remain in storage, and if buyers who are holding contracts on those pecans do not move them soon, some growers who have been storing those pecans could suffer a loss if buyers back out of their contracts. According to some growers, that has happened in the past, though it is most often associated with a drop in new crop pecan prices.

New Mexico grower Jay Hill is enjoying the record high prices for his pecans, but he says he isn't anxious for the price to go any higher as he fears that would trigger a decline in wholesale and retail demand. He says last year's 70 million-plus pound haul of New Mexico pecans represents a good year for growers, and though production numbers are expected to be slightly less than that this year, he says Georgia pecan production is expected to jump back after a disease-riddled season in 2016, and that means a flood of pecans will be on the market this year.

In Texas, Dr. Larry Stein, AgriLife Extension horticulturist in Uvalde, says the Texas pecan crop this year has been estimated to exceed 50 million pounds, and so far has been managed well. But he reports a few areas where both disease and pest pressure have dampened expectations, which will reduce yields for some growers.

TREE CARE IS CRUCIAL

"The crop is good in spots and not so good in spots," he said. "A lot is related to whether the producer had a big year last year and whether they did a good job taking care of the trees to produce another good crop this year."

Thinning trees, for instance, is important to reduce over-cropping, which actually reduces yield and quality. But considering the two year "on and off cycle," thinning the crop any given year can be a challenge.

He warns that at this point in the growing year, getting enough water on the tree and managing pests like hickory shuckworms, which burrow into the shuck and disrupt the flow of water and nutrients to the kernel, and weevils that can attack nuts at dough stage to lay their eggs, is critical. Regular scouting and treating trees for pests is also required to prevent late season problems.

If trees are irrigated, he says two inches of water a week is needed to guarantee nut fill.

Marketing analysts say with the upcoming holiday season just a few months away, demand for pecans should take a drastic upturn from both domestic and international buyers. In the meantime, pecan growers across the Southwest hope they continue to manage water and pests to help bring a healthy nut crop to market this year.

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