A summer of excessive rainfall will mean below average pecan volume out of Georgia, the U.S.'s top producing state for the crop. Combined with continued demand pressure from China, this could mean pricing woes and uncertainty for the southern state.

Following up a strong year of around 350 million pounds nationally, volume this season will show the effects of scab, a disease that leaves shells free of pecan meat, explained Jeff Worn, vice president of the South Georgia Pecan Co.

"It’s still too early to tell whether it’s going to be closer to 200 [million pounds] or 225 because we got so much rain in Georgia this year that it’s actually had a negative impact on the quality of the pecans," Worn told www.freshfruitportal.com.

"When it’s hanging on the tree, you don’t know if that thing is full of pecan meat or not. Scab can have that effect on the in-shell pecan itself. There are ones that are full of meat and the next one doesn’t have anything."

Although wet weather typically helps pecan production, too much of a good thing can backfire, explained John Robison, Georgia Pecan Commission chairman.

"The rains have stopped but back in June, July and August we had record rainfall. That has hurt the crop. We had too much rain and that is going to hurt the yields overall also. We had rain every day just about for at least a month and a half," he said.

"The quality is still going to be good but people that didn’t manage well or didn’t stay on top of things, a lot of them have lost their crop. They won’t be in the picture."

Robison said that in a top year, Georgia can produce around 100 million pounds of pecans. As of September, the National Pecan Shellers Association estimated a crop of around 75 million pounds. An average crop for Georgia comes in around 76 million pounds.

Precise estimates for the crop can be difficult, however, rooting in part in the decision to end funding for United States Department of Agriculture statistics on the nut.

Numbers are also complicated by a fluid supply from Mexico - a factor playing into the greater trade scheme with China which now buys around half of Georgia's crop every year.

"There is inventory that moves back and forth from Mexico. You can’t get a good handle on what is truly here and what isn’t. This has been an ongoing debate.

"You can’t tell what exactly is double counted or not. This stuff could be in the States one day but you have Hispanic shellers that have warehouses in the U.S. and warehouses in Mexico because it’s cheaper to process inventory in Mexico," Worn said.

"There may be some that’s brought to the U.S. to be sold but it was processed in Mexico. There’s a lot at stake there. There is a lot more there than we have time to think about."

The latest cold storage report from South Georgia Pecan Co. estimated that as of September there were 211 million pounds of pecans in U.S. cold storage. A fluid flow of supply, however, means estimates could be lower than the actual volume, creating falsely inflated prices on the U.S. market.

Chinese pressure

Combined with sales pressure from China, this means steep prices for the commodity.

"Last year it is estimated that China took well over 100 million pounds out of the U.S. supply. Hypothetically, if that was true demand and all of that was consumed, they could come in and buy 100 million pounds this year," Worn said.

"But that’s not the case. There wasn’t true demand. There’s still a ton of inventory sitting in China and they are able to manipulate what they buy this year."

Worn is happy to see local farmers selling large quantities but warned against over reliance on a market that has proved unstable for other major industries. What will happen to farmers if China decides to back out of the market, he asks.

"What I would hate to see is that a lot of domestic farmers put their faith solely in China. I know farmers here in Georgia that 80% of their customers are based solely around China. What if China just decides not to buy pecans next year? I’m not telling anybody what to do but I would be very concerned at night when I went home to go to bed knowing I was 80% dependent on China," he said.

Although the Georgia industry is making efforts to expand its markets elsewhere, the lure of China's untapped potential makes such growth difficult.

"On smaller crop years, when China has come in and paid really high prices, making me pay really high prices and in turn, making the domestic users and retailers pay really high prices, that has made the consumer also pay really high prices," he said.

"It cuts down on the amount of pecans that actually move and prohibits us from growing our market not only in the U.S. but internationally as well.

"Think of it from an ingredients stand point, of industrial manufacturers of pies and ice cream worldwide. If they have an opportunity to switch to a nut like a walnut or almond that is trading for more than a dollar a pound cheaper, do you think they’re going to do that? I think so."

Given the high costs of production, however, Robison said growers are currently thrilled to be receiving higher prices for their product and to see their volume jumping off of the shelves for export.

"The growers are elated to have this market that we didn’t have before. There’s a lot of new acreage and a lot is going to be planted in the foreseeable future," Robison said.

Robsion added that there have been efforts across a number of international markets to diversify demand. Marketing efforts from Georgia have included outreach to Turkey, India, the U.K., Spain and Germany.

Worn emphasized the importance of diversification as well but pointed out that growers are just beginning to see the full potential of Chinese demand.

"People act like every person in China is eating pecans and that everyone in China knows what a pecan is. That could not be more inaccurate. This is just this tip of the iceberg in China. There’s tons of business that could be done there," he said.

"Done in the right way, that could be great. We are actively working on developing new markets in India, Turkey, Europe, all over the world in an effort to create more of an outlet for pecans other than China."

Photo: USDA Agricultural Research Service