Why the recent large pecan acreage increase is good for the pecan industry.

The pecan industry is currently experiencing high growth throughout the U.S. An ag commodity that is in high demand is usually seen as a positive, but the rapid growth of the industry—mainly the latest pecan acreage increase—has some worried that the industry is growing too fast. Some worry that the industry could suffer harm from the surplus created by the increases in planted tree acreage. Take a look at the details of the issue below.

Pecan Acreage Increase by the Numbers

Americans love pecans, as does the rest of the world. High demand has created explosive growth, and many states are seeing an increase in newly planted pecan acres. Nowhere is that growth as great as it is in Georgia, where approximately 30 percent of the U.S.’s pecans are grown, according to a Farm Press article on the growth in the pecan industry. It cites about 20,000 to 25,000 newly planted acres of pecans in Georgia over the last five years, adding to the state’s 2012 total of 123,415 acres, according to the U.S. Census of Agriculture (2012).

Many in the industry feel that so many new acres will flood the market with pecans and will devalue the commodity. The sentiment is “we won’t be able to give them away.” However, there are more factors at play than simply acreage.

Factors Affecting the Pecan Industry

The growth of ag commodities is not a clear cut process, and pecans are no exception. There are multiple factors that affect the industry.

• U.S. and global demand. Demand is growing both at home and abroad, so it’s important for the pecan industry to have a supply to meet rising demands. The pecan industry has never offered a consistent supply, according to the aforementioned Farm Press article. Having a secured supply chain is necessary to get manufacturers on board with adding pecans to their products.
• Harvest number discrepancies. There is no consistently used method for calculating current pecan acreage, and the 40,000-acre discrepancy between The S. Census of Agriculture numbers and the UGA Farm Gate Survey shows how large that discrepancy is. It’s likely that hobby orchards and residential trees are inflating the extent of the pecan acreage increases.
• The Pecan Marketing Order. Earlier in 2016 the pecan industry voted to start a national marketing order. The industry will soon begin to market pecans on a national level. Many other tree nuts have found success with national marketing orders, and pecans will likely benefit as well.

There’s no doubt there will be growing pains, but the industry needs to produce more pecans to expand into the future, and a pecan acreage increase is one avenue to help the industry expand. As the nation’s land lending specialists, AgAmerica Lending creates custom land loan packages for the nation’s tree nut growers and producers, featuring our low interest rates, long amortizations, and outstanding 10-year line of credit.