Authors: Respectively, Gerald Thomas Chair and Extension Specialist, Department of Agricultural Economics and Agricultural Business, New Mexico State University. (Print Friendly PDF)

The United States is the world’s largest pecan-producing country. Two types of pecans are produced in the U.S.: native or seedling and improved varieties. Native pecans are varieties that developed under natural conditions. Seedling pecans are produced from seed (the nut) and have not been budded or grafted. Improved pecans are varieties that have been genetically developed through breeding and grafting techniques to produce more nuts, and nuts with a greater percentage of nut meat. Depending on the variety, pecan trees require 205–233 frost-free days for the nuts to reach maturity, and this restricts pecan production to southern states. Other countries producing pecans include Australia, Brazil, Israel, Mexico, Peru, and South Africa.

A recent action by U.S. pecan growers has the potential to change the economics of the industry to some degree. On May 6, 2016, the U.S. Department of Agriculture (USDA) announced the passage of a Federal Marketing Order (FMO) for pecans by an overwhelming majority of pecan growers in the 15-state production area of the nation. The final rule was published in the Federal Register of August 4, 2016, and took effect the following day.

The summary reads:

This rule establishes a marketing agreement and order (order) for pecans grown in the states of Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas. The order provides authority to collect industry data and to conduct research and promotion activities. In addition, the order provides authority for the industry to recommend grade, quality and size regulation, as well as pack and container regulation, subject to approval by the Department of Agriculture (USDA). The program will be financed by assessments on handlers of pecans grown in the production area and will be locally administered, under USDA oversight, by a Council of seventeen growers and shellers (handlers) nominated by the industry and appointed by USDA. (pp. 51298–51312, Fed. Reg. vol. 81, no. 150)

Pecan Production by States

The following states all have some level of commercial pecan production: Alabama, Arizona, Arkansas, California, Florida, Georgia, Kansas, Louisiana, Mississippi, Missouri, New Mexico, North Carolina, Oklahoma, South Carolina, and Texas (Table 1). There are also some pecan trees grown in Kentucky, Maryland, Tennessee, and Virginia. Improved varieties are utilized in production mostly in Arizona, Georgia, New Mexico, and Texas. The highest utilization of native and seedling varieties is in Oklahoma and Texas. The top three states based on combined utilization are Georgia, New Mexico, and Texas.

Over the 2013–2015 period, the utilized production of all varieties averaged about 261.5 million pounds. The improved varieties accounted for about 86% of that production.

Pecan Prices

The U.S. average price for improved pecans has been consistently above the U.S. average native pecan price. In part, this price differential results from quality differences, meat yields, and differences in quantities produced.

The average price of all pecans during the 2013–2015 period ranged from $1.73 to $2.20 per pound, averaging $1.96. Over the same period, U.S. average prices for native pecans ranged from a low of $0.92 per pound in 2013 to a high of $1.36 per pound in 2015, and from $1.90 (2013) to $2.12 (2015) per pound for improved pecans. During this same period, U.S. improved pecans averaged $2.11 per pound, while native or seedling pecans averaged $1.07 per pound—an average price difference of $1.04 per pound. Differences in prices from state to state reflect national and local difference in supply and demand, as well as differences in quality, nut meats obtained, and market outlets. The annual gross value of pecans produced ranged from $460.4 million in 2013 to $560.2 million in 2015, a 22% increase over the period.

Pecan Imports/Exports

Historically, pecan imports and exports were small (both less than 10% of total supply, on a shelled basis) prior to the 1990/91 season (Table 2). From that point forward, both import and export shares have grown, but at different rates. Import share reached almost 17% in the 1990/91 season and has grown since then to an estimated 42% in the 2015/16 season. The export share went to just over 11% in the 1990/91 season and reached slightly more than an estimated 29% in 2015/16. Clearly, both imports and exports have become important for the U.S. pecan industry. The export market holds particular importance, especially in light of flat domestic consumption over many years, hovering around 0.5 pound per capita. The newly established marketing order includes authority for conducting research and promotion activities that may alter the domestic consumption situation.

For further reading

Guide Z-502: Pecan Prices and Grades
https://pubs.nmsu.edu/_z/Z502/

CR-675: Agriculture’s Contribution to New Mexico’s Economy
https://pubs.nmsu.edu/_circulars/CR675/

Original authors: Tom Clevenger, Professor, and Mark Blake, Associate Professor. Subsequently revised by Esteban Herrera, Extension Horticulturist.

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Don Blayney is a College Professor in the Department of Agricultural Economics and Agricultural Business at New Mexico State University. He earned an M.A. in economics from NMSU and a Ph.D. in agricultural economics from Washington State University. His primary interests are in dairy economics, rural development, and agricultural policy issues.

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Revised August 2017 Las Cruces, NM