Economic Importance of the Pecan Industry


Guide Z-501
Revised by Don Blayney and Paul Gutierrez
College of Agricultural, Consumer and Environmental Sciences,
New Mexico State University

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

Photograph of a pecan orchard.

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.

Table 1. U.S. Pecan Production, Season Average Price, and Value

Variety and State 

Utilized production

Price per pound

Value of utilized production

2013

2014

2015

2013

2014

2015

2013

2014

2015

1,000 pounds 

Dollars

1,000 dollars

Improved varieties

Alabama

2,500

1,500

1,600

1.94

2.06

2.17

4,850

3,090

3,472

Arizona

22,500

21,000

22,500

1.90

2.00

2.40

42,750

42,000

54,000

Arkansas

2,000

2,200

1,200

1.60

1.91

1.98

3,200

4,202

2,376

California

5,000

5,000

3,960

2.06

2.14

2.18

10,300

10,700

8,633

Florida

700

100

190

1.72

1.75

2.17

1,204

175

412

Georgia

83,000

74,000

90,000

1.96

2.34

2.18

162,680

173,160

196,200

Louisiana

1,500

2,500

1,000

1.40

1.52

1.71

2,100

3,800

1,710

Mississippi

3,800

700

1,000

1.23

1.57

1.54

1,615

270

372

Missouri

500

210

310

1.34

1.93

2.01

670

405

623

New Mexico

72,000

67,000

73,000

1.90

2.10

2.50

136,000

140,700

182,500

Oklahoma

3,000

4,000

3,000

2.05

1.63

2.09

6,150

6,520

6,270

South Carolina

1,500

200

420

2.00

2.16

1.65

3,000

432

693

Texas

22,000

49,000

27,000

1.79

1.96

2.30

39,380

96,040

62,100

United States

220,000

227,410

225,180

1.90

2.12

2.31

417,758

482,323

520,529

Native and seedling

Alabama

770

200

300

1.02

1.14

1.23

785

228

369

Arkansas

700

1,300

1,000

0.83

0.86

1.10

581

1,118

1,100

Florida

D

D

D

D

D

D

D

D

D

Georgia

6,000

2,000

3,000

1.24

1.38

1.36

7,440

2,760

4,080

Kansas

D

D

D

D

D

D

D

D

D

Louisiana

9,500

11,500

4,000

0.86

0.79

1.00

8,170

9,085

4,000

Mississippi

1,700

300

300

0.95

0.90

1.24

1,615

270

372

Missouri

2,240

460

1,200

1.01

1.04

1.50

2,262

478

1,800

Oklahoma

17,000

8,000

10,000

0.80

0.92

1.45

13,617

7,384

14,500

South Carolina

60

50

30

1.50

1.27

1.26

90

64

38

Texas

6,000

12,000

8,000

0.90

0.98

1.47

5,400

11,760

11,760

Other States

2,360

930

1,280

1.13

1.21

1.30

2,672

1,121

1,668

United States

46,330

36,740

29,110

0.92

0.93

1.36

42,632

34,268

39,687

All pecans

Alabama

3,270

1,700

1,900

1.02

1.14

1.23

5,635

3,318

3,841

Arizona

22,500

21,000

22,500

1.90

2.00

2.40

42,750

42,000

54,000

Arkansas

2,700

3,500

2,200

1.40

1.52

1.58

3,781

5,320

3,476

California

5,000

5,000

3,960

2.06

2.14

2.18

10,300

10,700

8,633

Florida

D

D

D

D

D

D

D

D

D

Georgia

89,000

76,000

93,000

1.91

2.31

2.15

170,120

175,920

196,200

Kansas

D

D

D

D

D

D

D

D

D

Louisiana

11,000

14,000

5,000

0.93

0.92

1.14

10,270

12,885

5,710

Mississippi

5,500

1,000

1,300

1.14

1.37

1.47

6,289

1,369

1,912

Missouri

2,740

670

1,510

1.07

1.32

1.60

2,932

883

2,423

New Mexico

70,000

67,000

73,000

1.90

2.10

2.50

136,800

140,700

182,500

Oklahoma

20,000

12,000

13,000

0.99

1.16

1.60

19,767

13,904

20,770

South Carolina

1,560

250

450

1.98

1.98

1.62

3,090

496

731

Texas

28,000

61,000

35,000

1.60

1.77

2.11

44,780

107,800

73,860

Other States

2,360

930

1,280

1.27

1.26

1.41

3,876

1,296

2,080

United States

266,330

264,150

254,290

1.73

1.96

2.20

460,390

516,591

560,216

Source: USDA–NASS, Noncitrus Fruits and Nuts 2015 Summary (July 2016).

D = Data withheld to avoid disclosing data for individual operations.

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.

Table 2. Selected Pecan Supply and Utilization (shelled basis) Data, 1980/81 to Present1

Utilization

Season2

Imports

Total Supply

Exports

Domestic

Per capita

1,000 pounds

Pounds

1980/81

952

133,341

4,665

97,824

0.43

1981/82

849

181,583

4,194

103,983

0.45

1982/83

1,625

177,773

7,298

113,186

0.49

1983/84

5,789

185,658

3,376

112,567

0.48

1984/85

1,934

180,180

2,720

127,090

0.54

1985/86

14,298

175,626

2,264

113,410

0.47

1986/87

10,918

196,312

2,755

130,134

0.54

1987/88

12,966

197,525

3,935

131,071

0.54

1988/89

2,718

200,267

5,885

152,639

0.62

1989/90

15,855

159,588

11,215

113,369

0.46

1990/91

26,235

158,770

17,740

118,134

0.47

1991/92

20,480

162,310

17,082

112,685

0.44

1992/93

31,099

137,788

15,045

101,299

0.39

1993/94

21,728

200,068

17,213

136,594

0.52

1994/95

34,221

166,716

13,739

98,806

0.37

1995/96

32,604

208,966

18,311

135,927

0.51

1996/97

27,064

175,685

19,838

130,924

0.48

1997/98

35,621

208,685

22,011

123,554

0.45

1998/99

40,383

169,005

17,605

130,858

0.47

1999/2000

28,963

209,902

20,335

113,415

0.40

2000/01

32,990

201,788

20,045

132,740

0.47

2001/02

35,456

230,039

24,972

128,879

0.45

2002/03

41,672

196,304

30,523

137,078

0.47

2003/04

62,719

208,392

34,169

133,046

0.46

2004/05

81,150

204,879

30,565

145,124

0.49

2005/06

75,403

229,845

38,181

132,075

0.44

2006/07

56,998

207,980

44,105

133,303

0.44

2007/08

79,853

290,681

71,319

133,924

0.44

2008/09

61,855

245,503

52,652

150,627

0.49

2009/10

83,178

257,385

70,502

146,923

0.48

2010/11

88,457

268,824

61,479

164,528

0.53

2011/12

74,610

242,028

74,113

113,993

0.36

2012/13

79,347

274,044

91,274

134,664

0.43

2013/14

92,493

271,367

81,408

111,826

0.35

2014/15

103,964

310,210

99,944

155,943

0.49

2015/16 P

114,842

273,678

80,277

142,203

0.44

1Conversion factors from in-shell to shelled basis vary year to year for production, stocks, and exports, and were 0.45 in 1996/97, 0.44 in 1997/98, 0.45 in 1998/99, 0.40 in 1999/2000, 0.44 in 2000/01, 0.43 in 2001/02, 0.45 in 2002/03, 0.42 in 2003/04, 0.44 in 2004/05 to 2006/07, 0.47 in 2007/08, 0.49 in 2008/09, 0.44 in 2009/10, 0.48 in 2010/11, 0.46 in 2011/12, 0.47 in 2012/13, 0.49 in 2013/14 and 2014/15, and 0.41 in 2015/16. For imports, the conversion factor was a constant 0.50.

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2Season begins in October as of 1989; prior to 1989, season began in July.

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P = Preliminary.

Source: USDA, Economic Research Service calculations.

For further reading

Guide Z-502: Pecan Prices and Grades
http://aces.nmsu.edu/pubs/_z/Z502/welcome.html

CR-675: Agriculture’s Contribution to New Mexico’s Economy
http://aces.nmsu.edu/pubs/_circulars/CR675/welcome.html


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


Photo of Don Blayney.

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