It's Time for the Pecan Industry To Get It's Head Out of the Sand

February 21, 2020

Over the next few months, every major pecan industry association will be meeting to discuss the 2020 crop, prices, trade issues, the direction of the industry, etc.  As is normally the case, there will be a plethora of complaints about pricing, inconsistent yielding of inshell, imports from Mexico, the poor quality of pecans in some of the nation’s largest retailers, etc.  Some will want to complain about the American Pecan Council, its board members, where the assessment is being spent, etc., but there will probably be no discussion about the industry’s unwillingness to do what is necessary to solve many of the above problems.  There are three things that could help to address the aforementioned issues, all of which the APC has attempted to resolve but continues to get push-back from the very constituents it is tasked with assisting.  I am referring to accurate and timely data from the handlers, accurate information from the US Government and a set of mandatory standards.

Accurate and timely data is critical when it comes to projecting supply and demand, both of which dramatically impact price.  The almond industry, which annually handles well over 2 billion kernel pounds, collects data from their handles at the end of each month and publishes said data ten days later.  Their reports are eagerly anticipated and relied upon by customers, processors and growers around the world.  By contrast, the US Pecan Industry, with crops less than 6% the size of the almond crop, can’t collect and publish their data in thirty days after receipt.  Why is that?  Our handlers have access to the same technology.  They’re certainly just as smart. 

Then there is the data published by the USDA, Foreign Agriculture Service, relative to imports and exports.  While FAS does not actually collect the data, the US Department of Commerce does, their attitude regarding the inaccuracy of the data published is inexcusable.  They could care less. When questioned about the issues raised by the National Pecan Sheller’s Association and the APC, they refer all complaints to the Department of Commerce’s Census Bureau who could also care less.  So, what am I referring to?  I am referring to the fact the FAS knowingly publishes data that overstates the supply of pecans by as much as 80 million pounds, inshell basis, per year.  Part of the problem has to do with inshell sent to Mexico for shelling.  The Commerce Department counts the inshell going to Mexico as an export and the returning meats as an import; in effect counting the same product twice.  But that is not the only problem.  The bigger problem has to do with Mexican shipments overseas. To save time and money, many of the pecans being shipped to China by Mexico are actually transiting through US ports; Los Angeles/Long Beach and Houston, TX to name just two.  Like the prior example, the product coming into the country is counted as an import and then counted as an export when it leaves.  There is a simple solution; add three new Harmonized Codes to the Customs data base.  However, the Department of Commerce has told the APC that it cannot request such codes as they consider that to be lobbying, something the APC is not allowed to do.

Then there is the elephant in the room, MANDATORY GRADING STANDARDS.  The APC approved revised inshell and kernel standards a year ago.  However, because they are only voluntary, the USDA is dragging its feet on publishing them, their standard reply being “The process takes at least two years.  If they were mandatory, we could move them along much quicker.”  Why is this important?  Because it would address the problem with the quality of product on the store shelves, the problem of the quality of product coming into this country and the inconsistency in the yielding and grading of inshell.  It seems that people, both Sheller’s and Grower’s, would rather complain than solve the problem.  Would it mean an additional cost? Yes.  However, the almond and walnut industry’s have had no problem passing that cost on to their customers.  Further, it is a cost that would also need to be borne by the owners of pecans coming into the US.  It would not put US Growers and Sheller’s at a competitive disadvantage.  Quite the contrary, it would begin to level the playing field.

The APC has made tremendous strides in addressing many of the issues facing our industry.  However, without the help of the industry’s associations and stakeholders, it can only do so much.  Let’s use the thirty-two senators and hundreds of congressmen that represent us to make our industry more competitive while our handlers do whatever possible to make our product the best it can be.  Until we do so, neither our customers nor or competitors will take us seriously.