U.S. Pecan growers crack into Chinese market
Posted: 10. Dec, 2010 Last update: 30. Jul, 2011
China SignPost™ 洞察中国– “Clear, high-impact China analysis.”©
Gabe Collins and Andrew Erickson, “U.S. Pecan Growers Crack into Chinese Market,” China SignPost™ (洞察中国), No. 9 (9 December 2010).
Chinese pecan buyers are accumulating supplies as they prepare for the next Chinese New Year in early 2011, a peak nut consumption period in China. Rising incomes and increased demand for healthy foods are driving higher tree nut purchases in China. Pecan farmers in the US are benefiting from skyrocketing pecan exports to China in recent years. Exports grew from less than 5,455 tonnes in 2006 to 40,273 tonnes in 2009 (Exhibit 1). Based on conversations with growers, we believe U.S. exports of whole, in-shell pecans to China could exceed 54,000 tonnes in 2010.
Pecans are supply constrained because a tree requires up to 10 years before it bears commercial nut quantities. The supply-side crunch will force growers into a balancing act as they work to maintain price competitiveness in their core U.S. and traditional European markets, while also doing their best to develop the huge Chinese market. Jeff Worn of South Georgia Pecan Company says he is concerned that strong Chinese demand for pecans is boosting prices and if this continues, major domestic nut users could be forced to switch to substitutes, thus reducing growers’ options for selling pecans in the North American market.
Exhibit 1: U.S. pecan exports to China
tonnes, in-shell basis
Source: Texas Pecan Growers Association, NFF, Times Record News, West Texas pecan farmer
Chinese consumers’ primary pecan consumption times are the Mid-Autumn Festival and the Chinese New Year. The pecans’ meat is soaked in a flavored brine solution and then dry roasted. In terms of pecan consumption preferences, the growers tell us that Chinese buyers have historically preferred large pecans but that in recent years, smaller varieties are becoming more popular as buyers realize they have higher meat content per weight than larger types.
Pecans have historically been sold into China through spot sales. Growers and traders tell us they hear rumors that some Chinese buyers are now beginning to contract ahead of time for production from orchards they like, but that the market remains centered on short-term sales. The pecan supply chain into China is complex and involves many middlemen, which helps drive up the final retail price of nuts in the country.
The Texas Pecan Growers Association and Georgia Pecan Growers Association have told us that some growers negotiate directly with buyers from China, but that most tend to use export brokers. As buyers compete in this fragmented market, prices are driven higher and some market participants believe consolidation is essential to keep prices at manageable levels and maintain healthy market growth by keeping nuts affordable and thereby discouraging consumers from shifting to such alternatives as walnuts.
Pecans remain expensive by local standards in China and the primary marketing focus is on middle class consumers, as they have more latitude for discretion based on a food’s health benefits, even if the cost is higher than traditional staples. Based on our own observations during trips to China, we do not believe pecans have penetrated Chinese cooking, which still relies on peanuts and cashews.
In China, walnuts are the main competitor to pecans as a snack food. China is the world’s largest producer of walnuts (although it remains a net importer). China’s chief pecan growing areas are Hangzhou and Zhejiang, where the climate is similar to that in the Southeastern U.S. pecan-growing areas. US growers associations tell us the basic dividing lines for orchard size are: 1-to-100 trees is “small,” 101-10,000 trees is a medium size orchard, and anything with over 10,000 tress is “large.”
Based on the difficult topography of China’s growing areas and the still-small domestic pecan output, we believe most Chinese pecan farms are in the small range, with some in the medium range. NFF tells us new orchards are being planted in Zhejiang, Anhui, and Yunnan provinces, but believes that “it will be years before domestic producers can come close to meeting domestic pecan demand.” Other U.S.-based market watchers think China will probably never be able to produce significant volumes of pecans domestically.
We are told a key barrier to pecan farming in China is that the flat land which is ideal for planting a neatly arranged orchard is also in high demand for rice and grain farming, which takes precedence given grains’ baseline food security importance. Instead, Chinese growers tend to plant pecan trees on terraced hillsides. This poses operational problems for farmers since the trees can become very large, often exceeding 100 feet in height when fully mature.
On a steep hillside, pruning and harvesting such trees is almost impossible, which decreases farm efficiency. Limited pruning ability also hampers growers’ ability to smooth harvests by pruning limbs in order to ensure more consistent flowering. Growers in New Mexico, for example, have found that strategic pruning allows consistent nut-bearing and eases the normal “on year off year” cycle in which high nut production one year is followed by diminished output the next. Chinese farmers are attempting to create smaller trees that will be more manageable for hillside orchards. Tree grafting in which American pecan limbs are being grafted onto the smaller Chinese hickory tree is underway, but the results are not yet certain.
The long payout time is a major barrier to a supply side response to high nut demand and prices in China. Farmers and lenders are likely to be much more comfortable with funding greenhouses that grow vegetables and yield cash flow in their first growing season than they will in funding a farm that could take a decade to begin yielding large nut crops and during the entire time will be highly exposed to drought, severe weather, and disease risks. High margins and fast plant-to-yield times are one key factor behind China’s rising domestic vegetable production for domestic and export markets.
Chinese pecan growers would also likely face disease problems because the climate of China’s main nut-growing areas more closely approximates that of Georgia or East Texas than that of the arid southwestern U.S. Farmers in the southeastern U.S. face significant disease risks and must spray consistently to avoid casebearer, pecan weevils, and fungal diseases that thrive in hot and humid climates like that of the southeastern U.S. or south-central China.
At the very least, U.S. growers will have a window of opportunity at least through 2015 to serve as the primary source of pecans for China. As long as nut prices do not reach levels that prompt consumers to switch to walnuts, Chinese pecan consumption has substantial room to rise. The U.S. average per capita pecan consumption over the last decade has been around 0.6 kg per year, while China’s per capita consumption is closer to 0.03 kg per year. If more consumers acquire a taste for pecans and even half the per capita consumption gap closes, China could consume 400,000 tonnes per year of pecans, more than twice what consumers worldwide used during the 2008/2009 market year, according to the USDA.
About Us
China Signpost™ 洞察中国–“Clear, high-impact China analysis.”©
China SignPost™ aims to provide high-quality China analysis and policy recommendations in a concise, accessible form for people whose lives are being affected profoundly by China’s political, economic, and security development. We believe that by presenting practical, apolitical China insights we can help citizens around the world form holistic views that are based on facts, rather than political rhetoric driven by vested interests. We aim to foster better understanding of key internal developments in China, its use of natural resources, its trade policies, and its military and security issues.
China SignPost™ 洞察中国 founders Dr. Andrew Erickson and Mr. Gabe Collins have more than a decade of combined government, academic, and private sector experience in Mandarin Chinese language-based research and analysis of China. Dr. Erickson is an associate professor at the U.S. Naval War College and fellow in the Princeton-Harvard China and the World Program. Mr. Collins is a commodity and security specialist focused on China and Russia.
The authors have published widely on maritime, energy, and security issues relevant to China. An archive of their work is available at www.chinasignpost.com.
The views and opinions contained in China SignPost™ 洞察中国 are those of the authors alone and in no way reflect the views or policies of the authors’ employers. All relevant and eligible contents © Andrew S. Erickson and Gabriel B. Collins, 2010-
23 Responses to “U.S. Pecan growers crack into Chinese market”
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18. Jul, 2011
[...] U.S. Pecan growers crack into Chinese market | China SignPost …Gabe Collins and Andrew Erickson, “U.S. Pecan Growers Crack into Chinese Market, ” China SignPost™ (洞察中国), No. 9 (9 December 2010). Chinese pecan buyers … [...]
I am a Pecan Farmer in north florida. I pick a couple 100 thousand pounds a year.(depends on year) this year looks very promising and my trees are loaded like never before. I am looking for who ever will give me the highest price.I am also looking to load pods and ship to china directly. I need help contacting a chinese buyer.
Hi Josh, I’m one Chinese local pecan producer and I’m looking for pedan supply. If you get chance, could you let me know: How many counts per lb? What’s variety of your pecan? What’s the yield? When would be harvest in 2011? Thanks!
I am a farmer and importer/exporter in the United States, I can help you secure Pecan’s from Sources in Alabama and Georgia. I do goji exports out of China and would like to find something to import into that country. Contact me if interested as well. I can also assist you with exporting from any farm you find yourself in the US. I have a colleague in Beijing that can assist you.
Hi
i am a farmer and this year i expect to harvest 100 thousand pounds i you can help me out to sell my pecans to china will be greatly appreciated.
Hi Bo Jin:
I’m a USA PECAN NUTS supplier to supply you millions of fresh pecan nuts this 2012. sbrown5060@gmail.com 1-915-355-3777
Hi Josh,
I’m a Freight Forwarding agent. Sun Island Container Lines (New York) Inc. is our new branch in New York.
With the increasing number of China Pecans demanding, I think our strong Hong Kong/ China networks and experiences can help you to solve all of your exporting confusion and suspicion; thus, you can focusing to build up this huge China Market.
I’m looking forward to discussing your export or shipment planning before the harvest peak season.
Bests,
J
Hi Ting,
My name is Mei. I worked for a company who export pecans and others items to China. We are currently looking for Freight Forwarding agent. Feel free to contact me.
Mei
Please contact me at sbrown5060@gmail.com 915-355-3777 regarding shipping and direct selling our organic and other good US pecans to China. Thanks.
Hi Mei:
Please contact me at sbrown5060@gmail.com 1-915-355-3777 regarding Freight Forwarding to China of millions of pounds of your pecans and any other products too. Thanks.Locally in USA, China and everywhere too.
Hi Ting,
This is my correct contact email. I made an mistake and enter the wrong email. Sorry for the inconvenience.
Thank you
Mei
please contact me at sbrown5060@gmail.com 915-355-3777 regarding shipping direct selling of our very good US pecan to China. Thanks. Sue Brown.
I have buyer currently buying pecan and walnut for export to China. Kindly e-mail me your information to me.
Thank you.
Hi Josh, I am a pecan/nuts buyer from China and looking for the supply. Our company is based in NY. We are currently doing trading business with strong supply chain network. Kindly email me your information and we will pay the best price. Thanks.
Please contact me at sbrown5060@gmail.com 915-355-3777. We are looking for direct exporting to China or the best price. Thanks. Sue Brown.
Hi Josh,
We are exporting company and buyers from China. We purchased over 100 thousand pound of pecans last few years. If you are interested in selling your pecans, please contact me.
Mei
Hi Josh,
This is my correct contact email. I made an mistake and enter the wrong email. Sorry for the inconvenience.
Thank you
Mei
I have 126 acres of terraced cleared farm land in Dewitt County, Texas. I am looking for someone interested in putting in a pecan orchard. The old house is surrounded by all kinds of pecan trees, so I assume the rest of the place will grow pecans. If you know anyone who is interested please forward them my email address.
Thank you
I live in trenton south carolina and will like to get in the chinese market i can get many different kind of pecans
We pick pecans in Louisiana. Looks like we will have. Good crop this year and a reasonable amount. We pick natives, candies, elliotts and Stuarts. Also I buy pecans. I am looking for a good buyer who would be interested. Please email me and let’s talk!
I would like to make some contacts for selling pecans to china if price is right. If to late for 2011 season, get things lined up for 2012. I live on N.C. and S.C. border, i buy,crack and shell pecans
nuts8honey@embarqmail.com
Hello Mei,
My name is Shawn Kim and I am a sole agent of one of the biggest Pecan brokers in Georgia, I am working in between Asia and Gerogia, USA. most of Pecan supply is being done by big borkers and customers.
Please contact me if you are still intersted in Pecan import. Guaranty you the best price and stable supply for long term.
Thank you
Shawn Kim
skim.ga@gmail.com