Arizona Pecan Growers Respond To Strong Demand By Planting Thousands Of New Acres
The state’s pecan crop is going through a growth spurt. Thanks to strong global demand, farmers have been able to fetch some historically high prices for the product in recent years.
And many farmers are now banking that the trend will stick around, planting thousands of new acres, especially here in Arizona.
It’s harvest season at the Green Valley Pecan orchard in Sahuarita, Arizona, which means, right now, it can feel a lot like it’s raining pecans.
"Pecans are a three-step process," said farm manager Alan Brandt. It starts with an army of large machines that grab hold of the pecan trees and then shakes the nuts off their branches.
Once on the ground they’re gathered and sorted, and, depending on the farm, they can be shelled too.
"My father began planting pecans in 1965," said Dick Walden, the president of Farmers Investment Company, the parent company of this pecan orchard. He said right now, business is good.
"There is a very strong international demand," said Walden. "Has been growing since the early '80s."
That market growth began when demand for pecans took hold in Europe. But in the last 10 years, the growth has been more drastic.
"China has become a major importer of in-shell pecans. Using recent numbers maybe 18 or 20 percent of the world’s pecan supply have been destined for China," he said.
Walden added recent scientific publications on the nutritional value of nuts have helped too because now the world’s consumers consider them a health food full of good fats — and not just a junk food.
And it was factors like these that convinced the Walden’s family to make the decision to expand their orchard, nearly doubling the Walden's production capacity. But this decision isn’t an easy one for any farmer. Because, unlike other produce, such as corn or potatoes, orchards are more of an investment.
"It isn’t a crop that you, if the market goes bad, decide when you’re taking it out," said Harold Payne, the president of the Arizona Pecan Growers Association. "You’re married to that crop once you put it in the ground."
He explained it takes 10 years for pecan trees to mature and reach full productivity. In fact, most farmers don’t start making money on their new acres until about that time. But even with that cost, Payne said many are deciding to take the plunge now.
"We don’t have hard numbers because nobody really does an accurate survey, but the last survey I saw they estimated that there are about 7,500 or 8,000 new pecans either in or being planned in Arizona in the next several years," he said.
Payne estimates that's a 50 percent increase in this state alone. A number mirrored by other pecan producing states around the country.
Tim Richards, Arizona State University agribusiness economist, said when it comes to pecans, these farmers have to look at the market in the long term. That’s partly why that supply and demand curve can get so unbalanced and prices now are as high as they are. When demand increases for pecans, increasing supply takes a long time.
"The interesting thing about pecans is that in general it’s not your mom and pop with an acre kind of thing," he said. "These are big companies with a lot of investment and a lot of capital."
With fewer players, the market is slightly less volatile than other foods. But as sluggish growth conditions in China continue to result in significant losses for other Arizona industries like copper mining, is banking on a sustained Chinese demand for pecans a smart move? Richards said, while you can never know for sure, yes — at least for the foreseeable future.
"There is still the simple fact that there are 1.3 billion people. They’re becoming more wealthy. They’re starting to have western diets, and they're having our health problems too, unfortunately," Richards said. "So as they have their health problems they start to turn to healthier foods, kind of ironically down the road, and pecans and walnuts are part of that story."
Which means, for the time being, pecan orchards here and throughout the country, will continue to expand.
Updated at 9:20 a.m.