In this article, you will learn five reasons why pecans are so expensive and how there is a high demand for them.
Let’s get right into it.
Pecans are an in-demand commodity that are widely used in baking
As Americans enjoy pecan pie every Thanksgiving, farmers market their annual crop of pecans to leading food manufacturers who make it into a variety of products ranging from sweets to salad dressings and desserts.
These manufacturers increase demand for the crop by creating new products that work with dried pecans and include them as ingredients.
Peanuts are the main source of vegetable oil in the United States and are a primary ingredient used in baked goods.
Pecans are used to produce various types of food, which increases their value and demand with consumers.
Pecans are only available for a few months out of the year
Pecans are harvested during autumn and early winter, so they are highly sought after throughout the season.
The trees that produce them are dormant during spring and summer, making them unable to be harvested.
Demand for pecans is highest in the wintertime when people are looking for a snack to eat with Christmas cookies.
The availability of pecans is limited by their time of harvest, thus increasing their value on the market.
Pecans do not grow year-round, so they can only be harvested during one season which makes them more sought after and profitable to the farmer.
Drought is a factor in pecan farming and harvest
The drought that California is experiencing has caused the state to reduce its precipitation since December 2014 impacting pecans and other crops.
The shortage of rain will delay the harvesting of crops throughout the state which has an impact on farmers who supply them, thus causing a change in the supply-demand ratio.
Farmers in Texas also are suffering from a severe drought, which has also impacted their crop production and profits due to this shortage in quantity as well as quality.
As a result of these droughts, farmers have not been able to fully harvest their crops, which in turn increases the demand for pecans in the market.
Pecans grow on trees and are what you would call a tropical crop. The pecan trees naturally grow along rivers and other waterways across Texas, Oklahoma, and Louisiana, which is why they are such an important crop to those states.
However, as noted above, droughts have severely impacted the soil and the overall growth of the trees. The trees are dormant during the summer months, but they start to grow again in the fall and winter.
They are harvested during the autumn and winter, which is why people reach for them in the holidays. The demand for pecans has returned to normal levels now that there is no drought.
Pecans are not grown year-round, but they only can be harvested during one season. Therefore, their supply cannot meet demand which causes them to have values on the market.
Pecans are sold by the hundreds, so they are not easily split
Pecans are sold by the bushel, which makes them expensive. They measure about 100 nuts per pound, but cannot be split because there is one large shell around each nut.
The consumers can only buy them in larger quantities which dealers will then sell to food manufacturers.
Consider this. A typical pecan that you buy at the grocery store may cost $5.00, but the farmer that grew it was only paid $1.30 for it.
This is due to the demand that can fluctuate wildly depending on the time of year and what people are buying, so farmers must find other ways to make money from their crops.
Pecans are a specialty crop
Pecans are considered a specialty crop. Specialty crops require more intensive production practices than other crops, which makes them more valuable.
For example, the growth of the plant or tree is dependent on the weather in those specific regions so they are vulnerable to droughts and infestations that can severely impact their yield.
This makes pecans less reliable when it comes to consistent harvests year-to-year even though they provide high yields overall.
Another consideration is the difficulty of harvesting pecans. The trees grow along riverbanks and are difficult to access, so they must be harvested by hand.
They have a large, inedible hull that needs to be removed before the nut inside can be sold as well as methods used to prevent spoilage during transportation.
These factors increase production costs and make it a specialty crop with high demand on the market.
To conclude, when demand outstrips the supply of a certain commodity, there are only two possible solutions.
Either the price rises to balance demand with supply or the price falls to a level that encourages greater supply.
In the case of pecans, they are a very popular commodity in the United States, and their sale usually increases during Thanksgiving week every year.
So, as you can imagine, the supply of pecans often exceeds demand, and companies are forced to raise their prices to maintain or increase sales.