The key to any successful market, or to growing any market, is consumption. While price may have the greatest impact on consumption, without adequate supply, one cannot grow a market. Price therefore becomes irrelevant.
Some within the industry fear that the recent increases in pecan production, not only in North America but overseas, will only lead to lower returns for the grower. As proof of their claim, they point to the low prices of the past two years. Yes, there were a lot of pecans and yes prices did fall.
However, what they fail to acknowledge is the fact that had the price of inshell not risen to exorbitant levels, the oversupply situation would not have developed. Further, the prices only looked low because both inshell and meat prices had risen to unsustainable heights only to fall to more traditional levels.
One only has to look at last Friday’s Cold Storage figures for confirmation of this. With total supply at or near record levels, and with pecan prices at competitive levels with other tree nuts, consumption continues to grow. Including meats brought across the border from Mexico, the US Pecan Industry shipped almost 29 million pounds of meats last month; a near record for October.
Based on current consumption patterns, and considering the price and lack of availability of the other tree nuts, 2015 could be a record year for pecans. Responsible prices, combined with adequate supplies, have allowed the pecan industry to create new overseas markets while continuing to grow the recently stagnant domestic market.
It has also led to an influx of new capital investment in an industry that has not seen such interest in over twenty years; a ‘win-win’ for everyone.