New Tariffs Affect Pecan Industry
Pecans are the only tree nut indigenous to North America. So, it should come as no surprise to learn that the U.S. is the world’s leading producer of pecans. Responsible for up to 80 percent of the world’s pecan supply, the U.S. harvests up to 300 million pounds of pecans every year. You could say that’s pretty nuts.
What may come as a surprise to learn is that China and Hong Kong are the pecan industry’s largest export market. Last month, President Trump signed into law about $60 billion in tariffs affecting mostly Chinese products, causing the Chinese government to introduce tariff hikes on a slew of American products this month in retaliation. Among the products affected, as you have already guessed by now, is pecans.
Pecan growers around the country are expecting a hard hit from the tariffs on their bottom lines, since margins are usually fairly low in the industry and costs are high for growers. However, growers may not feel the full effects of this tariff until the September harvesting season. So, what does this mean for pecans in the U.S.?
Since the cost of importing pecans into China will rise, growers can expect to export less product to this country, leaving them with an oversupply of nuts for the year. This oversupply will actually lower pecan prices within the U.S., possibly even by 20 percent. Grocery stores will purchase pecans for lower, which translates into lower prices for the consumer. If you like to buy your nuts directly from a grower, those prices will drop to in order to keep up with lower store prices.
Despite this shock to the industry, growers remain optimistic about the future of the pecan industry: "I still think we're at the ground floor of what the pecan industry can be as far as growth globally," said Phil Croft, the chief operating officer of Hudson Pecan Company Inc.